Nissan has been hit with a $16 million (₦5.7 billion) fine by the United States Securities and Exchange Commission (SEC) for irregularities in the salary of its former CEO Carlos Ghosn. Breaking it down, the automaker is to pay $15 million of the total amount while Ghosn is to offset the remaining $1 million.
This is coming after Ghosn was charged with financial impropriety in Japan – a trial he is still awaiting. The former boss acquiesced to pay the $1 million but argued that it was within his legal rights to not plead guilty to the same criminal charges he is facing in Japan.
Former Nissan CEO Carlos Ghosn
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According to predictions, the fine will help the company which currently operates without a CEO get past the Ghosn controversy, which it has been facing for some time now. There are reports that the company’s dealership network in the U.S. is not pleased with their operations and direction at the moment. Lined-up products are not getting desired results due to the whole saga, hence, they are aging.
According to SEC, the board of the company bestowed Ghosn with the power to determine his financial compensations and earnings of the company’s executives and directors back in 2004. The Commission further revealed that, prior to his arrest in 2018, the former CEO influenced decisions for his staff to be allotted over $90 million from company accounts. He also made allowances for his retirement by $50 million.
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Commenting on the issue, co-director at SEC, Stephanie Avakian, said:
"Investors are entitled to know how, and how much, a company compensates its top executives.
"Ghosn and Kelly went to great lengths to conceal this information from investors and the market."
SEC stated that Nissan engaged in secret contracts in order to increase Ghosn’s earnings, altered calculations of his allowance to create room for a $50 million increase and back-dated official documents.
In response to the saga, Nissan disclosed that it was putting structures in place to resolve the problem. This measure includes setting up a governance system with three independent groups overseeing compensations, promotions and audits.