How Nissan’s CEO went from defiant to fired in 24 hours

Hiroto Saikawa’s tone bordered on defiant Sunday when discussing his future as chief executive officer of Nissan Motor Co. He accepted responsibility for the Carlos Ghosn scandals and said he’d resign after a successor was found, but he wasn’t taking the fall for a burgeoning controversy over his pay.

That strategy blew up 24 hours later when the embattled carmaker’s board pushed him out – citing his excess compensation. Saikawa’s last day will be Sept. 16, and the board is taking a look at a pool of about 10 candidates for the job.

The end of Saikawa’s four-decade career came in a conference room at Nissan’s Yokohama headquarters, about 17 miles (27 kilometers) south of Tokyo, where board members met for more than five hours – with some joining by video from overseas, according to people familiar with the matter. Nissan declined to comment on board discussions and declined to make Saikawa available for comment.

Alliance partner Renault SA was represented by Chairman Jean-Dominique Senard and Chief Executive Officer Thierry Bollore.

During the meeting, directors said they weren’t happy with the slow progress in finding Saikawa’s replacement, and voiced they wanted that process to be accelerated, according to the people, who asked not to be identified discussing a private matter. Saikawa said at press conference in January that he would “pass the baton” to new leaders as soon as possible.

Board members then discussed the internal investigation into allegations that Saikawa and other executives were paid more than they were entitled to, according to the people. The report was prepared by a team led by Christina Murray, the outgoing compliance chief, and parts of it were shown to directors, they said.

It contained allegations of financial misconduct by former Chairman Ghosn the auto titan who ruled over Nissan for two decades and former director Greg Kelly. But more importantly for Saikawa, there were details about his pay. Days earlier, the company confirmed he was overpaid by 47 million yen ($438,000) via stock appreciation rights.

The controversy first came to light after Kelly accused Saikawa, 65, in a magazine interview in June of improperly receiving compensation.

Speaking outside his Tokyo home on Sunday – prior to the board meeting – Saikawa said he shouldn’t be blamed for the excesses, and he wasn’t going to step down, especially after volunteering to pay the money back.

“I’m not responsible for that,” he said. “I will take responsibility for the Ghosn scandals and want the board’s nomination committee to find a succession plan as soon as possible in order to pass the baton.”

Inside the boardroom, several external directors said the payments were a serious problem, particularly since it came at a time when Nissan was trying to strengthen its corporate governance, according to the people.

Saikawa fired back that he shouldn’t have to resign right away, the people said. Later at the press conference, Saikawa would say that he regretted having to step down before being able to finish all he had set out to do but that the timing of his resignation was up to the board.

Yet he and the directors volleyed arguments back and forth for some time, prolonging the meeting, according to the people. Although Nissan found no illegality, Saikawa shouldn’t be exonerated for delegating those rights to Kelly, Motoo Nagai, head of the audit committee, said after the board meeting.

In the wake of the Ghosn saga, which exposed the company’s shortcomings when it came to policing executive pay. Nissan drew a line in the sand.

Eventually, worried about the perception of Nissan’s commitment to reform and the need to show a sense of urgency in turning things around, discussions heated up in the final hour and the board unanimously decided to remove Saikawa and search for the company’s third CEO in as many years, the people said.