Nissan’s chief executive, Hiroto Saikawa, is in the toughest fight of his corporate life. And it’s all Carlos Ghosn’s fault.
At least that’s what Mr. Saikawa has said for seven months since Mr. Ghosn — the architect of the Nissan-Renault-Mitsubishi alliance — was detained by Japanese prosecutors and accused of financial wrongdoing. Mr. Saikawa, once a loyal lieutenant to Mr. Ghosn, has relentlessly attacked his former mentor’s character and blamed him for myriad woes at Nissan, including failures of corporate governance and its sharp drop in 2018 profit.
But now Mr. Saikawa, a lifelong Nissan employee, is facing scrutiny — from shareholders, former colleagues, the press and others — about his own competence and probity.
On Tuesday, he presided over the company’s first annual meeting since Mr. Ghosn’s fall. Mr. Saikawa won reappointment to Nissan’s board, where he has served for 14 years, thanks to support from Renault, which controls over 43 percent of Nissan’s stock. Despite clashes that have soured the relationship between Mr. Saikawa and the French company, it chose not to challenge his leadership.
Still, he faced calls for shareholders to reject him, in part to make a clean break with the company’s troubled past. Two angry investors unsuccessfully called for his ejection from the board. Vote tallies will not be announced for days, and it remains to be seen how many shares were thrown behind the 65-year-old Mr. Saikawa.
In an unusual move ahead of the meeting, two proxy advisers sent letters to Nissan shareholders recommending that they oppose Mr. Saikawa’s reappointment because of the company’s poor financial performance and questions about how he could not have been aware of some of Mr. Ghosn’s actions.
“Even if it is clear to many observers that Ghosn was involved in inappropriate behavior, what is not clear is whether the wrongdoing could really have been conducted by Ghosn and Kelly alone,” ISS Governance, one of the proxy advising firms, wrote in a report. It refers to Greg Kelly, another former Nissan executive who faces charges of hiding Mr. Ghosn’s compensation from shareholders.
Mr. Saikawa, it continued, “has long been regarded as one of Ghosn’s allies, and therefore, it would be difficult to consider him totally unconnected to Ghosn’s wrongdoing.”
Adding to the pressure, in a lengthy interview published earlier this month with the Japanese magazine Bungei Shunju — a journal of literature and politics — Mr. Kelly said Mr. Saikawa was a “zealous supporter” of Mr. Ghosn and “regularly discussed matters that fall under the category of company secrets” with him.
In the interview, which appeared to be half-alibi and half score-settling, Mr. Kelly said Mr. Saikawa was directly involved in negotiating a deal to pay Mr. Ghosn his post-retirement compensation. The allegation raises questions about whether Mr. Saikawa was aware of the underreporting of Mr. Ghosn’s compensation, one of the central charges against the former Nissan chief, Mr. Kelly and the company. Mr. Kelly said he and Mr. Saikawa presented a document laying out the offer to Mr. Ghosn for his approval. Mr. Saikawa signed it — a fact confirmed by an independent panel established by Nissan — but Mr. Ghosn never did, he said. Mr. Kelly was the head of human resources at Nissan as well as a board member.
In addition, Mr. Kelly told the magazine that Mr. Saikawa had personal money issues and had asked Nissan for financial help to buy a second home in Tokyo. In one instance, Mr. Kelly said, Mr. Saikawa had Nissan retroactively change the execution date of stock-based compensation in an effort to increase his own earnings — accusations that echoed charges of financial impropriety levied against Mr. Ghosn.
Mr. Saikawa has not responded to Mr. Kelly’s claims in the magazine, and Nissan declined to make him available for an interview. He has made no comment about the proxy letters.
In a January news conference, Mr. Saikawa acknowledged that the company’s management had a “heavy responsibility” for Nissan’s troubles. He said he was working to put the company in the hands of new management “as soon as possible.”
Faced with questions about his plans to resign at the shareholders’ meeting, Mr. Saikawa said decisions about the company’s leadership would be made by the new nomination committee, adding he intended to make recommendations.
Mr. Ghosn’s trial could expose more information about Nissan’s inner workings and governance failures that insiders fear could be embarrassing to both Mr. Saikawa and the company.
Mr. Ghosn, who says he is innocent, has been charged with four counts of financial impropriety, including using company funds to enrich himself.
Nissan, too, has been charged with financial wrongdoing related to Mr. Ghosn’s compensation. It has acknowledged that its corporate governance procedures failed to prevent the alleged financial misconduct, but it has repeatedly issued statements saying Mr. Ghosn and Mr. Kelly were the sole cause of the wrongdoing.
At Tuesday’s meeting, shareholders also voted for reforms to tighten corporate oversight.
Further threatening Mr. Saikawa’s standing, the company is performing poorly. Its operating profit dropped by nearly 45 percent in 2018, and when Nissan announced its annual results in May it projected that operating profit would shrink by more than a quarter in the fiscal year ending next March. Since Mr. Saikawa took over from Mr. Ghosn as chief executive in April 2017, the company has been hit with a series of scandals relating to inspections and emissions.
And Nissan is bleeding talent, as recruiters lure away executives who fear for the company’s future. In recent months, among other executives, Jose Munoz, the former head of North America and China, and Christian Meunier, the president of Nissan’s Infiniti division, have left. Both declined requests for comment.
More important for the global alliance, which sold 10.7 million vehicles in 2018 and shares costs and technology, Mr. Saikawa has repeatedly frustrated his partners at Renault. Although they continue to support him, the relationship has soured.
Mr. Saikawa, who entered Nissan straight out of Japan’s elite Tokyo University in 1977, has spent much of his career dealing with Renault. He was a purchasing expert when Mr. Ghosn took over Nissan on behalf of the French company in 1999, and his cost-cutting skills made him a Ghosn favorite.
He rose rapidly, and by 2005 he had been appointed to Nissan’s board. But he made few friends along the way. He was much like Mr. Ghosn, former colleagues said, extremely intelligent and ruthlessly efficient but without the boundless charisma that allowed the alliance’s leader to effectively manage the often fractious partnership.
In May, Mr. Saikawa rebuffed attempts by Renault to discuss a merger between the two companies on terms the French automaker believed were favorable to Nissan. In the last few weeks, his reluctance to endorse plans for a proposed marriage between Renault and Fiat-Chrysler — which would have helped guarantee the French carmaker’s future — was a major factor in the deal’s failure.
While the tensions with Renault have been smoothed for now it is unclear how long the détente will last. If the two automakers are to survive in an increasingly competitive industry, their partnership must be strong, a fact acknowledged by both sides.
Shortly after Renault’s deal with Fiat-Chrysler fell apart at the beginning of June, the French carmaker’s chairman, Jean-Dominique Senard, used his company’s stake in Nissan to force his chosen representatives onto the Japanese carmaker’s governance committees. Mr. Saikawa initially condemned the move as “most regrettable.”
Since Mr. Ghosn’s fall, Mr. Saikawa has become “more isolated,” according to a person with knowledge of his behavior, and without Mr. Ghosn’s guidance has become less decisive, frequently changing his mind on issues affecting the alliance.
The tensions with Renault were on full display at the meeting, where shareholders accused it of trying to undermine Nissan. Mr. Senard apologized, saying his actions were never intended to hurt the alliance.
While shareholders’ criticisms of Mr. Saikawa were relatively restrained in comparison, that does not mean they have forgiven him.
“Partly, he’s paying for his own mistakes,” said Hisao Inoue, a journalist who has closely followed Nissan for years, adding, “because he was close to Mr. Ghosn all along.”
“So, to some extent, it’s understandable that people are asking, ‘Aren’t you just part of Ghosn’s gang?’”