TOKYO – Here’s an unpopular opinion that’s hardly being voiced but needs to be heard amid the seemingly ceaseless swirl of scandal engulfing beleaguered Nissan.
Despite being forced to resign under a cloud of controversy about his own compensation, departing CEO Hiroto Saikawa is not the villainous hypocrite many observers paint him out to be.
From the moment it was revealed Saikawa improperly netted some $440,000 in stock-linked incentives, critics galore tried to paint him with the same brush as his former boss, Carlos Ghosn.
But there are important differences between Saikawa’s transgressions and Ghosn’s, if you believe the official narratives proffered by Nissan. Both men benefited from a misuse of an executive incentive scheme called share appreciation rights, but that’s where the similarities end.
Saikawa did not intentionally try to game the system, according to Nissan, and has said he will pay back the excess gains. All told, he pocketed hundreds of thousands of dollars.
But Ghosn allegedly manipulated the system on purpose to reap bigger payouts and then tried to cover it up. He has not yet talked about returning any money. And Ghosn’s harvest was huge: 140 million yen ($1.3 million) over what he was supposed to get, according to Nissan’s audit.
But obsessing over incentive pay misses the point.
The share appreciation rights have nothing to do with Ghosn’s criminal case. Why? Because even Nissan concedes that abusing the in-house system is not illegal, just improper.
Indeed, Ghosn wasn’t indicted for abusing the share-linked incentive pay. He was indicted for what prosecutors deem actual violations of the law. Those charges include alleged falsification of company financial filings and breaches of trust for inflicting damage on Nissan for personal gain. The amount of money involved -- millions of dollars -- also dwarfs that at stake the share rights.
No one has accused Saikawa of anything even approaching the scope of these alleged misdeeds.
Should Saikawa step down? Yes, to take responsibility for not being able to stop Ghosn’s alleged abuses in the first place and for breaking Nissan’s own rules on the share-linked incentives.
He overstayed his welcome, and his position as an effective leader was increasingly untenable.
His departure helps close an ugly chapter in Nissan history and paves the way to rebirth.
But is Saikawa’s downfall proof that Nissan is still mired in a culture of corruption, as critics say?
Ironically, it may show just the opposite. Saikawa set up a new independent audit committee as part of sweeping corporate governance reforms to improve transparency and accountability.
That the committee Saikawa set up was the committee taking Saikawa down is solid evidence that Saikawa’s hard-fought reforms are actually beginning to work.