After eight months exposing one of the world’s largest auto alliances, a Tokyo court is addressing a crucial question: Was Carlos Ghosn a leader who couldn’t keep or lose Nissan?
The man actually on trial in Tokyo District Court is Greg Kelly, a gray-haired Tennessee attorney who worked at Nissan for 30 years before being arrested in 2018 on charges of conspiring to conceal the true size of Ghosn’s $ 87 million wages.
But as the trial has progressed, prosecutors and defense have turned increasingly forensic on Ghosn. The former Nissan seat itself would have been in the dock had it not fled from Tokyo to Lebanon in 2019.
That focus on the absent Ghosn has presented the court with two diametrically opposed images of the man.
Prosecutors have portrayed Ghosn as a feared autocrat through testimonials that ranged from former top executives to relatively low-level workers. According to witnesses, Ghosn’s word was within Nissan law, he had no control over his greed and his plans would eventually hurt Nissan.
One of them, who gave testimony from behind an opaque screen, told the court that in her 10 years working for Ghosn, she had gone from feeling surrounded by a “special aura” to feeling motivated. was through greed. “I’m not sure obsessing is the correct phrase,” said the witness.
This version of Ghosn, according to prosecutors, was a man who would, of course, direct Kelly to put in place a mechanism to hide the amount of his salary if it suited his ambition to maintain a certain image in France and Japan.
Kelly’s team, meanwhile, has portrayed Ghosn as an executive whose future Nissan absolutely depended. As the company swayed from crisis to crisis, including the aftermath of the 2011 Tohoku earthquake and tsunami and the wrongful firing of Renault employees on suspicion of corporate espionage, Ghosn became a growing “retention risk”.
Nissan was very concerned that Ghosn would join a rival company, and if he did, he would likely bring a significant number of executives with him, Kelly told the court.
Kelly’s testimony challenged the notion that Nissan executives feared Ghosn would force the Japanese company into ever-increasing compromises with its French partner Renault. The main motive for keeping him, Kelly said, was to “provide his services to Nissan and protect Nissan’s independence from Renault”.
According to Kelly and other former Nissan executives, concerns about Ghosn’s retention increased after his salary was reduced to address a change in Japanese compensation disclosure rules introduced in 2010. Ghosn, one of the highest paid executives in Japan, feared disclosure of his full salary would cause a public backlash and demotivate Nissan employees.
The central question for the judges is whether Ghosn instructed Nissan executives to find ways to pay him what he expected but only declare the reduced amount, or whether the company devised a new compensation plan on its own because it feared its CEO to lose. A crucial additional question is whether he would actually have provided services for his post-retirement compensation.
In January, Toshiyuki Shiga, Nissan’s former Chief Operating Officer, testified that Ghosn had told him to think of ways to receive the unpaid pay after retirement. He took it as a guideline from his boss, although he was aware of “the legal risk” of not making it public.
The change in Japanese rules coincided with pressure from the French government to cut Ghosn’s salary and reduce his influence as CEO of Renault, which is 15 percent owned by the French state. Ghosn became increasingly frustrated with both the French government and his salary, Kelly told judges last week.
“There was a time in July or September when, at the age of 60, he seriously considered retiring [March 2014], ”Said the former head of legal affairs. “When he retired at the age of 60, he was still a young man and could have a full-time role as a top manager at any car company anywhere in the world.”
Concerned that Ghosn would leave Nissan, Kelly said he had consulted Hiroto Saikawa, Ghosn’s chosen successor as CEO. They agreed that Nissan should consider retiring for Ghosn through a non-compete and advisory agreement.
In February, Saikawa, who stepped down as CEO of Nissan in late 2019, also said he shared the view that Ghosn had become a enormous achievement “.
“To be [Saikawa’s] was believed to be worth $ 100 million over years, ”said Kelly. “Many of Nissan’s best ideas came from Mr. Ghosn. If he came up with two ideas worth $ 50 million, and I knew he would, he would pay for the contract.”
According to excerpts from statements Ghosn made to prosecutors, the former chairman said he had never asked for the post-retirement contract and that the terms were undesirable, so there was no formal agreement with Nissan on his deferred compensation.
The case continues.