Renault-Nissan has no plan for extra bonus scheme, Ghosn says

on Jun17

Renault shareholders approved Carlos Ghosn’s $7.87 million salary in a narrow 53-47 vote.

UPDATED: 6/15/17 2:24 pm ET — new story

PARIS — Renault-Nissan has no current plans to introduce an additional bonus scheme for executives at the carmaking alliance, Chairman Carlos Ghosn said on Thursday.

Ghosn made the comments at Renault’s annual shareholder meeting after Reuters reported that alliance bankers had drawn up plans designed to channel millions of euros in extra, undisclosed bonuses to Ghosn and other managers via a specially created service company.

“This is the document of a consultant who came to make a certain number of proposals,” Ghosn said. “We are open to proposals, but that doesn’t mean when we listen to an idea that we are going to put it into practice.”

The incentive plan proposal has not been put to the Renault board or executive committee, Ghosn said, adding that no decision was expected any time soon on such a scheme.

The preliminary proposal drew criticism from some investors already concerned about compensation, governance issues and an ongoing French criminal probe into allegations of systematic Renault diesel emissions fraud. The company has denied any wrongdoing.

“Such a scheme would bypass the Renault and Nissan shareholders,” Dieter Waizenegger, head of the activist CtW Investment Group, told Le Monde newspaper ahead of the meeting. “It violates every principle of transparency.”

Under the incentive plan proposal reported by Reuters, the alliance partners and Nissan-controlled Mitsubishi would pay a share of synergies into an independent Dutch-registered company for redistribution to their executives, with one-third reserved for Ghosn and a few top managers.

The arrangement would avoid any legal obligation to disclose the compensation to shareholders, according to the presentation by investment banking firm Ardea Partners. Ardea was founded last year by Christopher Cole, a former Goldman Sachs co-chairman and a trusted Ghosn adviser, who has worked for him on past deal studies.

Renault shareholders approved Ghosn’s 7.06 million euro ($7.87 million) CEO salary in a narrow 53-47 vote on Thursday, a year after their rejection of his 2015 payout forced a 20 percent variable-pay cut.

Ghosn also received a similar package as Nissan CEO, a role he relinquished in April as he prepares to hand over operational leadership of the alliance, while likely staying on in one or more chairman roles.

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