Nissan announced today that it is cutting the compensation for CEO Hiroto Saikawa by 50 percent.
Saikawa was paid 500 million Yen (RM19.3 million) in the previous fiscal year. This is the second time Saikawa has cut his salary. In November 2017, he volunterered to return the remaining portion of his annual salary following a costly quality scandal in Japan.
Nissan is currently facing many financial challenges, following criminal charges against its former Chairman and CEO Carlos Ghosn and the associated corporate drama being played out in the media space.
The whistleblowing ouster of Ghosn was also related to Nissan’s own disagreements with Ghosn and its partner Renault, a relationship that Nissan says is not fair as Nissan contributes more to the Alliance’s revenue but enjoys less control.
Sales in Nissan’s two biggest markets - USA and China - are slowing, and the company has warned investors that it expects this year’s operating profit to drop by 45 percent over the previous financial year.
Saikawa’s salary cut can also be seen as a symbolic gesture to return to Japanese values, which see Ghosn’s 16.9 million US Dollar annual compensation as excessive. Prior to his removal, Ghosn was the highest paid car company executive in Japan, and is among the top-5 highest paid in the world. Ghosn’s salary is 10 times more than CEOs of far more profitable Japanese automakers like Toyota and Honda.
Separately, Saikawa announced yesterday that he welcomes the proposed merger between Fiat Chrysler Automobiles and Renault. In a statement to the press, Saikawa said:
"I am aware that FCA’s merger proposal will be discussed by Renault’s board this week.
“I believe that the potential addition of FCA as a new member of the Alliance could expand the playing field for collaboration and create new opportunities for further synergies.
“That said, the proposal currently being discussed is a full merger which—if realized—would significantly alter the structure of our partner Renault. This would require a fundamental review of the existing relationship between Nissan and Renault.
“From the standpoint of protecting Nissan’s interests, Nissan will analyze and consider its existing contractual relationships and how we should operate business in the future."
Reuters have reported that Nissan stands to win big if the merged FCA is to leverage on electric vehicle (EV) technology developed by the Renault Nissan Mitsubishi Motors Alliance, as the Alliance’s EV tech is contributed mostly by Nissan. Existing agreements within the Alliance requires other brands wishing to use Nissan’s EV tech to pay royalties to it.