Nissan CEO, Hiroto Saikawa To Resign Amid Pay Scandal

In less than a year Nissan has lost its chairman to a financial misconduct scandal; its profits have plummeted; and its ties to Renault, often seen as crucial for its future, have fallen apart. And now, its embattled chief executive is leaving in the shadow of a pay scandal.

The departure of the executive, Hiroto Saikawa, follows months of speculation about his ability to manage the Japanese carmaker since it was rocked by the arrest last year of its former chairman Carlos Ghosn. The resignation was announced less than a week after Mr. Saikawa said he had received payments from Nissan well beyond his earnings an admission that echoed the charges that led to Mr. Ghosn’s fall.

“As the auto industry is facing a big transformation, the question is who should be running the company?” Nissan’s chairman, Yasushi Kimura, said at a hastily arranged news conference at Nissan’s headquarters in Yokohama. “Replacing the top executive of the company will enable it to be a leader in the auto industry.”

After the news conference, once the board members had left, Mr. Saikawa stepped into the room and faced the crowd of reporters alone. He apologized for leaving the company before he could fulfill his promise of putting it back on track. During his tenure, Mr. Saikawa said, problems plagued the company. “We are seeing a lot of repercussions for what we have done in the past,” he said. “I should have clarified and ironed everything out.”

Nissan’s business has suffered since November, when Mr. Ghosn was arrested and accused of financial wrongdoing. The company’s profits last year fell sharply, while global vehicle sales were down 6 percent last quarter. Employees said morale at the automaker had plummeted, and top talent has left the company as workers lost faith in Mr. Saikawa’s ability to lead.

Mr. Saikawa’s comments on Monday seemed more defiant than contrite, and he expressed some bitterness over his predicament. Over more than 30 minutes, he repeatedly listed his accomplishments at the company, including setting up a new corporate governance system. His largest regret, it seemed, was not continuing on in the position.

The departure takes effect next Monday. Nissan is considering a list of 10 candidates for Mr. Saikawa’s successor, said Masakazu Toyoda, who leads the company’s nomination committee. A decision is expected by the end of October.

Nissan’s chief operating officer, Yasuhiro Yamauchi, will serve as interim chief executive, Mr. Toyoda said. Mr. Kimura said that when Mr. Saikawa asked the company’s board to find his successor as soon as possible, the directors agreed unanimously that “it was better for him to resign immediately.”

Earlier Monday, Nissan’s board received a briefing on the results of a nearly yearlong investigation into the company’s governance. The inquiry was prompted by Japanese prosecutors’ arrest of Mr. Ghosn on suspicion of financial misconduct, including underreporting his compensation by tens of millions of dollars. He denies any wrongdoing.

In June, shareholders approved a slate of governance changes, marshaled through by Mr. Saikawa, intended to address what Nissan described as an overconcentration of power in the hands of Mr. Ghosn, who presided over the company’s alliance with Renault and Mitsubishi. The alliance, which involves sharing purchasing and design expertise, was once considered a case study of innovation in the era of globalization.

Since Mr. Ghosn’s arrest, Nissan’s internal inquiry had expanded to include other aspects of the business, including the compensation of Mr. Saikawa and other top executives. Speculation that Mr. Saikawa would resign had swirled since Thursday’s public admission that he and other executives received unearned compensation as a result of what he described as an error by the company. Once a loyal deputy to Mr. Ghosn, he has been withering in his criticism of his former boss since the arrest.

The allegation was first disclosed in June, when Greg Kelly, a former Nissan senior executive, accused Mr. Saikawa of using a stock-based compensation plan to increase his pay. Mr. Kelly has been charged with conspiring to underreport Mr. Ghosn’s compensation, an allegation he denies.

In a summary of Nissan’s internal investigation shared with reporters Monday, the company said the overpayments to Mr. Saikawa had totaled more than 47 million yen, or about $440,000, after taxes. Mr. Ghosn and Mr. Kelly, as well as an additional six directors and executives, also benefited from the stock scheme, which it said Mr. Kelly had manipulated on behalf of Mr. Ghosn without the knowledge of the other beneficiaries.

On Monday, Mr. Saikawa admitted that he had asked Mr. Kelly to find a way to increase his compensation, but said he had not realized the executive would do something “against the rules.” A representative for Mr. Ghosn said the accusations that he had abused the stock-based scheme were “a shameful attempt from Nissan to use Mr. Ghosn as a scapegoat,” adding that the company’s treatment of Mr. Saikawa constituted a “double standard.”

A representative for Mr. Kelly did not immediately respond to a request for comment. Whether Mr. Saikawa’s resignation begins a new era between Renault and Nissan remains to be seen. Relations have been fraught since Mr. Ghosn’s arrest, and tensions over the future of the alliance flared regularly, despite efforts by Renault’s chief executive, Jean-Dominique Senard, to cultivate a personal relationship with Mr. Saikawa, with whom he said he spoke nearly every day by phone.

Renault had no immediate response to the news of Mr. Saikawa’s departure. A top issue facing Mr. Saikawa’s successor will be how to strengthen the alliance as the global auto industry rapidly consolidates, with giants like BMW and Daimler cooperating on crucial innovations like autonomous driving technology. Analysts say that only by combining forces can Nissan and Renault afford the huge technology investments necessary to avoid obsolescence.

Renault and Nissan have acknowledged that they still need each other to survive and thrive. But Mr. Senard told Renault shareholders recently that “a tense climate” reigned between his company and Nissan. On his way out on Monday, Mr. Saikawa could not resist taking one last swing at Mr. Ghosn and Mr. Kelly, whom he blamed for his fate. “They should feel bad about this,” he said. “But they haven’t expressed any apology for creating the situation at Nissan. I want Mr. Ghosn and Mr. Kelly to feel bad about this situation that they have created.”