Report: Ghosn Had Extraordinary Control Over His Own Pay

How could Carlos Ghosn have hidden $70 million in compensation from Nissan Motor Co., as his accusers claim? Bloomberg News says the company’s lax oversight gave him almost total control over his own remuneration.

Sources tell the news service that Nissan’s internal rules, coupled with reverence toward him for saving the company from bankruptcy, gave Ghosn nearly total control of how and how much he was paid. Bloomberg says a “cult of Ghosn” was firmly established before the company introduced its current corporate governance code in 2015.

Ghosn has been embroiled in multiple fights over compensation since he became the company’s chief operating officer in 1999. He immediately championed an approach to compensation that rewards performance over seniority, an unusual approach for a Japanese company.

Nissan’s financial department was not responsible for verifying the compensation figures for senior executive that were posted in annual securities reports, according to one of Bloomberg’s sources.

Nissan’s own governance report states specifically that the chairman determines the compensation for each director in consultation with two top executives. One of those executives is Greg Kelly, the director in charge of human resources, who was arrested on Nov. 19 along with Ghosn as an accomplice.

In 2010, Ghosn was widely criticized in Japan for collecting $9.8 million in compensation at Nissan, six times that of the company’s chairman. He also received $10 million from Nissan in 2014 and 2015.

Complaints about Ghosn’s compensation haven’t been restricted to his work at Nissan. Ghosn also is CEO and chairman of Renault SA. In 2016 the French government, which owned 18% of Renault at the time, pushed that company’s board to cap Ghosn’s bonus.