YOKOHAMA, Japan -- Nissan’s chairman said embattled CEO Hiroto Saikawa, engulfed in fresh misconduct allegations, will step down this month and that the company's chief operating officer, Yasuhiro Yamauchi, will serve as acting CEO while the company seeks a full-time boss.
The chairman, Yasushi Kimura, said Saikawa will step down effective Sept. 16 and that the company hopes to make a decision on his successor by the end of October.
Kimura’s comments came as the company’s board outlined the findings of an internal investigation into the misconduct that led to the arrest of former Chairman Carlos Ghosn and left Japan’s second-largest automaker beset in turmoil. The investigation’s scope has gradually expanded over time to include a probe of Saikawa’s use of an executive incentive program.
Saikawa, 65, had recently indicated a willingness to resign, and the board unanimously felt it was better to act on the matter immediately, Kimura said at a hastily called late-night press conference at Nissan's global headquarters here south of Tokyo.
“We felt immediate action would be appropriate,” said Kimura, who was appointed chairman of the board in June. “We are in a serious stage of searching for successors.
The decision to remove Saikawa offers a complete break with the Ghosn era and paves the way for a fresh start under leadership not so closely associated with the tainted former chairman.
Saikawa was a loyal Ghosn lieutenant during much of Ghosn’s 19-year tenure and served as co-CEO with Ghosn during a one-year transition before becoming solo CEO in 2017.
Saikawa, who appeared at the end of the news conference, said the confusion of the investigation and the outcry over his inappropriate use of a stock-linked compensation scheme added urgency to his intention to step down. He had said in June that he wanted to accelerate the succession process so he could pass the baton to new leadership.
But Saikawa also bemoaned a long list of unfinished business, including the rekindling of profits, a shoring up of sliding sales and a restoration of frayed relations with Renault.
“We are seeing a lot of repercussions from what we did in the past,” he said. “I couldn’t finish everything, and I express my apologies for stepping down while things are yet to be done.”
Nissan has a short list of 10 possible successors, including at least one woman, a non-Japanese and one person with experience at French alliance partner Renault, said Masakazu Toyoda, chair of Nissan's recently created nomination committee.
“It’s a very diverse list,” Toyoda said.
The candidates were narrowed down from about 100 contenders since the summer. The process began in July, Toyoda said, noting the goal of deciding by the end of next month.
“There isn’t much time,” he said. “But we believe this will translate to improved governance.”
Saikawa had come under increasing pressure to step down amid fresh revelations he exercised a stock-linked compensation scheme to boost his payout by nearly half-a-million dollars. The internal audit concluded that Saikawa’s actions weren’t illegal, partly because investigators were convinced he had no intention of deliberately gaming the system.
Saikawa said he would return the excess proceeds to Nissan.
Nissan’s board decided at its Monday meeting to abolish the practice of offering these so-called share appreciation rights as an incentive to select executives.
In June, Nissan shareholders approved Saikawa's reappointment to the board, despite growing controversy about his oversight during the time of Ghosn's alleged misdeeds.
Since taking the helm in 2017, Saikawa's tenure has only been besieged by scandal.
The first crisis erupted in late 2017, when Nissan disclosed it had been conducting faulty final inspections of vehicles at assembly plants throughout Japan.
That triggered the recall more than 1.2 million vehicles in Japan, a call back of virtually every passenger car the company produced for sale in Japan over the previous three years.
More inspection misconduct was uncovered in 2018, and then came Ghosn's arrest.
After Ghosn's takedown, Saikawa was among his harshest critics.
Saikawa's initial denunciations were all the more shocking in Japan, because he was long seen as Ghosn right-hand man.
Ghosn parachuted into Nissan as the Renault-installed "Cost Cutter" to revive the struggling Japanese automaker through fiscal discipline.
But it was Saikawa who won Ghosn's trust as the enforcer who helped break the Nissan keiretsu of affiliated suppliers in the early days of the Nissan revival plan. And later, as Nissan's veteran chief competitive officer, he helped chart the company's course with Ghosn.
Since Ghosn's arrest and indictment, however, Nissan has plunged into upheaval.
The company was soon beset by a flurry of executive exits and departures to other companies.
Saikawa struggled to rekindle operating profit that plunged 99 percent in the fiscal first quarter, reboot flailing U.S. sales and mend strained ties with Renault.
Japan's No. 2 automaker is also laying off 12,500 workers and trying to reform corporate governance.
The recent allegations that Saikawa gamed Nissan's share-linked incentive program to deliver a bigger personal payout further tarnished his tenure amid mounting pressure to step aside.
Naoto Okamura contributed to this report
