Daily Times

Brazilian-born Carlos Ghosn long stood out among the world’s auto executives as a hard-nosed workaholic willing to take drastic measures to get struggling companies motoring again.

As head of the Renault-Nissan-Mitsubishi alliance, Ghosn created an industrial behemoth numbering 470,000 employees, selling 10.6 million cars last year from 122 factories around the globe.

But the man once dubbed “le cost killer” by the French media has suffered a spectacular fall from grace, with Japanese prosecutors charging him Monday over claims he under-reported his compensation to authorities by millions of dollars in the five years to 2015.

They also rearrested him on fresh claims he under-reported his pay in the three following years as well.

Since his shock arrest on November 19, Ghosn has been fired from the boards of Nissan and Mitsubishi Motors, following a months-long inquiry prompted by a whistle-blower. He denies the allegations.

It is not the first time Ghosn has hit the skids over pay. He was among the highest-earning CEOs in France and one of the best-paid foreign executives in Japan. His total compensation as head of the alliance reached some 13 million euros ($15 million) in 2017, according to the consultancy Proxinvest.

Last year he denied a report that the alliance was planning to pay hidden bonuses to its executives by setting up a subsidiary in the Netherlands.

The French state, which owns a 15 percent stake in Renault, forced Ghosn to accept a 30 percent pay cut from the 7.25 million euros he took home as Renault CEO last year, calling the amount “excessive”.

The government had already protested in 2016, joining with 54 percent of voters at Renault’s annual meeting in refusing to authorise his pay package.

The vote was overruled by Renault’s board, but Ghosn later accepted a pay cut after Emmanuel Macron, France’s economy minister at the time, threatened to step in with a new compensation law.

“Compensation is more scrutinised today than in the past,” Ghosn told The Financial Times in June, but added: “You won’t have any CEO say, ‘I’m overly compensated’.”

The criminal investigation in Japan has reportedly lifted the lid on Ghosn’s globetrotting lifestyle.

Sources have said Nissan funds were secretly used to pay for residences for Ghosn in Lebanon and in Rio de Janeiro.

‘Never accept interference’

Ghosn spent the first two decades of his career with the French tyre-maker Michelin. After an early stint in his native Brazil, he was quickly promoted and credited with turning around its North American operations.

He was recruited by Renault in 1996 to work alongside then CEO Louis Schweitzer, where he helped restructure the former state-owned carmaker and steer it back to profitability.

Three years later, he was sent by Renault to head the newly acquired Nissan group with the challenge of doing the same thing within two years. He managed it within one.

The performance made him a hero in Japan, with manga comics devoted to a businessman who claimed to get by on six hours of sleep a night and unapologetically upended the country’s consensual norms.

“A boss has to have 100 percent freedom to act and 100 percent responsibility for what he does. I have never tolerated any wavering from that principle, I will never accept any interference,” he once said.

After restoring Renault and Nissan to sound financial footing — in the process shedding thousands of jobs at each company — Ghosn shifted gears to the future of automaking, by pressing hard to develop electric cars.

More recently he has been focusing on reviving Mitsubishi, which secured a lifeline in 2016 when Nissan bought a 34 percent stake.

Published in Daily Times, December 11^th 2018.