Nissan to be fined €19.8m over Carlos Ghosn’s pay

Car maker does not intend to dispute penalty amount

 Carlos Ghosn, former chairman and CEO of the Renault-Nissan Alliance,

Carlos Ghosn, former chairman and CEO of the Renault-Nissan Alliance,


Japanese regulators have demanded a ¥2.4bn (€19.8 million) fine from Nissan, alleging it understated pay for its former chairman Carlos Ghosn over a four-year period.

The Securities and Exchange Surveillance Commission (SESC) has also disputed some of Nissan’s findings from an internal probe on Mr Ghosn’s pay, which was at the centre of allegations that led to his arrest last November.

In a statement on Tuesday, Nissan said it takes the recommendation seriously. “In the absence of any special circumstances or other reasons, the company intends not to dispute the alleged facts and the amount of the. . .penalty.”

Since his arrest last year, Mr Ghosn has been charged with four counts of financial misconduct, two of which accuse him of failing to report more than $80m in deferred compensation.

He has denied all the charges. His lawyers say Nissan’s securities filings accurately disclosed Mr Ghosn’s compensation and that the company never committed to pay, nor did the former chairman ever receive, any unreported compensation.

Nissan revised its accounts for its financial years 2013 to 2017 in May, but the SESC’s findings did not match the revised figures. The SESC’s investigation covered only the past five years because of a statute of limitations.


The company’s internal probe found that Mr Ghosn allegedly received about ¥140 million more than he should have, by extending the date when his share appreciation rights – which link pay to share price rises – were exercised. Former chief executive, Hiroto Saikawa, and several other Nissan executives were also improperly overpaid using the same scheme, the company has said.

The SESC said it could not determine whether Mr Ghosn’s SAR-linked compensation should have been disclosed for the two years until March, 2018, highlighting the ambiguity of Japanese disclosure regulations for pay that is linked to share performance.

When Nissan published its revised accounts in May, they contained an additional ¥2 billion related to Mr Ghosn’s SARs for the two years, based on the fair value at the time the number of exercisable SARS was fixed.

“We could not determine that this was falsified disclosure,” an SESC official said, adding that it also could not judge the fair value of the SARs in question.

The fine recommended by the SESC is the second biggest penalty for a Japanese company for falsified financial documents after a ¥7.4 billionn fine levied on Toshiba in the wake of its €1.1 billion accounting scandal in 2015.

The amount sought is half the original fine because Nissan notified regulators about the understated pay before the SESC launched a formal probe. The final decision on the fine will be made by the overarching Financial Services Agency. – Copyright The Financial Times Limited 2019