Nissan CEO’s $12M pay gets shareholder scrutiny
Wednesday, June 29, 2011
YOKOHAMA, Japan (AP) — Nissan Chief Executive Carlos Ghosn fielded some tough questions from shareholders about his 982 million yen ($12 million) paycheck Wednesday, but won approval with no problems for another two-year stint as head of the Japanese automaker.
Ghosn, who is also head of Nissan Motor Co.’s alliance partner Renault SA of France, told an annual shareholders meeting that his pay was based on global standards. He said the average compensation for comparable auto industry chief executives is $15.3 million.
“Nissan is a Japanese company with global management,” he said at a hotel in Yokohama, southwest of Tokyo.
Brazilian-born Ghosn, who has French citizenship, noted that talented multicultural management could easily find jobs elsewhere, and that rivals were looking to recruit from Nissan’s ranks.
Ghosn came from Renault to steer a recovery at near-bankrupt Nissan in 1999 and oversaw painful cost cuts that have now put Japan’s No. 2 automaker on a solid growth track.
It is targeting an 8 percent share of the global auto market under a six-year strategy announced last week. Nissan now has 5.8 percent global market share.
Americans may be used to hearing about the high pay of their country’s executives but individual compensation began to be disclosed more regularly in Japan only last year, under a new rule requiring disclosure of pay for executives receiving 100 million yen ($1 million) or more. Ford Motor Co. Chief Executive Alan Mulally is paid $26.5 million.
Ghosn earned 891 million yen last year — already among the top salaries for a head of a Japanese company.
Most Japanese top executives are paid far lower salaries, partly because their roles tend to be different, especially in the past.
They don’t wield the managerial power of a U.S. or European corporate chief, acting more like what is known as a “salaryman president” in Japan, rising up in the ranks gradually to become a symbolic cheerleader, while key decisions are still made by a larger team.
Nissan, which makes the Leaf electric vehicle, the March subcompact and Infiniti luxury model, is among the handful of Japanese companies that has a foreigner at the top.
Japanese electronics and entertainment company Sony Corp. disclosed Tuesday that Chief Executive Howard Stringer, a Welsh-born American, received 345 million yen ($4.3 million), along with stock options worth 518 million yen ($6.4 million).
Ghosn has emerged as a rare example of charismatic management in a nation that favors team work over individuals standing out.
At Wednesday’s meeting, one investor, who did not give his name, asked about Ghosn’s riches, noting Ghosn also owns 3 million Nissan shares.
“It should be reassuring for shareholders that I have a lot of shares,” Ghosn replied, stressing that meant he has a stake in the automaker’s success.
Other shareholders were impressed with Ghosn’s leadership. One woman said she had no questions, but wanted to give Ghosn a book as a gift. He accepted, shaking her hand by the stage.
Yoshinobu Ota, 74, a retired trust banker, said he is invigorated by the momentum that Ghosn has found for Nissan.
“I could feel the passion from Nissan under Mr. Ghnosn. I am so grateful to him,” he said after the shareholders’ meeting.
“Some may argue that his pay is too much, but he has that kind of ability,” he said.