Nissan Motor Co. and Carlos Ghosn will pay a combined $16 million to settle a U.S. regulator’s allegations that they failed to disclose more than $140 million in compensation that the automaker’s ex-chairman was slated to receive in retirement.
Nissan was fined $15 million, while Ghosn, 65, was hit with a $1 million penalty, the Securities and Exchange Commission said in a Monday statement. The claims stem from a decision that allegedly gave Ghosn broad authority over pay decisions: Starting in 2004, the board delegated to him power to set compensation for executives and directors, including his own.
That led to Ghosn, with substantial assistance from his subordinates, excluding more than $90 million in compensation from Nissan’s public disclosures to investors, the SEC said. Ghosn also took steps to increase his retirement allowance by $50 million, according to the regulator.
The SEC also reached a settlement with former Nissan director Greg Kelly, who agreed to pay a $100,000 fine over allegations that he helped Ghosn hide pay. Ghosn was barred from serving as a director or officer of a public company for 10 years, while Kelly agreed to a five-year ban. Nissan, Ghosn and Kelly, 63, all resolved the cases without admitting or denying wrongdoing.
Nissan said in a statement that it cooperated fully with the SEC and has “‘promptly implemented remedial acts to prevent recurrence.”
Lawyers for Ghosn and Kelly said the decision to settle with the SEC should have no bearing on separate Japanese cases against their clients.
“Greg is a guy with limited resources,” said James Wareham, a Washington-based attorney for Kelly. He said that his client settled so that he can concentrate on the case he faces in Japan.