Nissan CEO Steps Down After Admitting to Being Overpaid
NIssan CEO Hiroto Saikawa has become the second casualty of a scandal that has threatened to engulf the Japanese car manufacturer as its Chief Executive follows in Carlos Ghosns footsteps.
The CEO of Nissan, Hiroto Saikawa, is stepping down just days after he admitted to being improperly overpaid and potentially abusing internal procedures.
Nissan has suffered a scandal over past 12 months with the Japanese car manufacturer rocked by the bitter departure of its chairman Carlos Ghosn, also over alleged financial misconduct, although Saikawa’s indiscretions seemed to be less severe than his one-time mentor.
Current chairman Yasushi Kimura confirmed the news that the current CEO will depart next week, telling reporters: “Saikawa recently has indicated his inclination to resign, and in line with his desire to pass the baton to a new generation of leaders at Nissan, he will resign on 16 September.”
Nissan have announced that current COO (Chief Operating Officer) Yasuhiro Yamauchi will be the interim CEO and take charge of the company from that date. His first task looks set to be seeking out and appointing a permanent successor for Saikawa by the end of October.
Reports suggest that Saikawa tendered his resignation on Monday. During his resignation he appeared to confirm that he had received payments that broke company policies, but was quick to point out that these payments were not illegal. The payments were revealed as part of an internal investigation which appears to have been instrumental in revealing the improper actions of the current CEO.
The investigation has now cost Nissan two CEO’s as it became apparent that It was the same inquiry that led to the arrest and departure of Ghosn. However, Saikawa’s indiscretions seem unlikely to land him in the same degree of trouble as his predecessor, who is currently on bail and awaiting trial, despite repeatedly stating his innocence.
Saikawa stated that he was not aware of the payment improprieties, claimed by Japanese media to run to hundreds of thousands of dollars, and sought to lay the blame on a system that former CEO Ghosn had put in place while he was head of the company.
Saikawa has worked for Nissan his whole life and was promoted to the role of CEO last November after his former mentor Ghosn was ousted. It was hoped that the appointment of Saikawa would mark a shift in the company’s fortunes, however his tenure has instead been plagued with rumours that he may be in the firing line, particularly after hugely disappointing results were posted this year.
The resignation is another misstep in a bad year for the carmaker and for its relationship with partner Renault (who own 43% of Nissan) who have reportedly been pushed to breaking point by the ongoing scandal.
With Saikawas – a Nissan lifer who has spent his entire working life at the company – failure, it seems Renault may be looking for a change in recruitment policy with their own chairman Jean-Dominique Senard among the favourites to replace Saikawa.
The changes scandal is more damaging for Nissan as it continues to battle a difficult environment within the worldwide auto sector that has seen sales and demand fall amid volatile markets and the US-China trade war.
The falling sales have not only impacted profits but have also resulted in the loss of thousands of jobs, though the one job that Nissan was hoping would be safe was that of its CEO. Saikawa’s unfortunate actions, mimicking those of his predecessors, mean that once again they are on the hunt for a new CEO that can help them move on from the investigations, scandals and problems that have plagued the company over the last year.
