TOKYO (Kyodo) – Nissan Motor Co.'s Executive Compensation for the 2017 budget may have exceeded the nearly $ 3 billion determined by shareholders, with a large sum going to its arrested former President Carlos Ghosn, sources close to the case said Wednesday.
While only $ 735 million (USD 6.5 million) was reported in the company's securities reports as compensation for Ghosn in the year ending in March, the sources stated that the payment to charismatic bosses had actually been around 2.5 billion yen.
In that case, Nissan may have paid Ghosn, who faces allegations of counterfeit securities reports and other executives in total in excess of 2.99 billion yen in fiscal policy 2017, which limits the cap adopted at a 2008 general meeting.
The action can be a "serious trust" for shareholders who can lead to delisting, says some experts.
According to the company rules, compensation for each executive decision shall be taken by means of talks with the chairman of the board and the representative board. But the sources believe that Ghosn, the 64-year-old who led the company for almost 20 years, had actually determined the sum alone.
Ghosn was arrested last week by Tokyo prosecutors for allegedly violating Japan's financial instruments and the law of exchange by underreading his remuneration by about 5 billion yen over five years to March 2015, although he received about 10 billion yen during the period.
The prosecutors are also considering building a case against him for allegedly underreporting a further 3 billion yen in remuneration received over three years from April 2015.
Ghosn has denied falsifying the annual report but acknowledged that he did not include in the documents part of the compensation he would receive when retiring because "payments have not been settled", according to the sources.
Ghosn believed that he would receive approximately 2 billion yen annually as compensation. However, he instructed Greg Kelly, a former Nissan representative, arrested with him for alleged conspiracy, saying he earned 1 billion yen per annum in securities reports and planned to receive the remaining amount after retirement.
The post-retirement payment was due to approximately 8 billion yen over the eight years from the 2010 financial year.
According to the sources, Ghosn obviously tries to argue for an alleged document that showed that Nissan agreed on the payment and claimed he had not signed it.
Under the Financial Instruments Act, compensation must be reported in a securities report when it is determined, even if the actual payment is planned in the future.
Kelly has denied something wrong, according to his family lawyer in the United States who offers him legal advice.
He believes that it was with the company's interest and he also believes that he is not guilty of any criminal behavior, whether in Japan or in the United States. Aubrey Harwell, a lawyer in Tennessee, told Kyodo News in a telephone conversation.
Harwell also said that Kelly "had plans to be with his family back in the United States for Thanksgiving," but he is now in a "difficult situation" when he is held and subjected to interrogation.