Saikawa described the retirement agreements as drafts that couldn’t take effect without a full set of signatures and board approval. Copies of the drafts presented in court show the signatures of Saikawa and Kelly, but the documents lack Ghosn’s signature and are left undated.
Even though Saikawa presided over Ghosn’s stunning 2018 arrest as CEO of Nissan, his testimony seemed to support arguments made in Kelly’s defense. Kelly, a former Nissan director who was a longtime human resources executive, was arrested with Ghosn and charged with helping Ghosn hide tens of millions of dollars in deferred compensation.
Similar to Saikawa, Kelly argues that the agreements the two of them signed were post-retirement plans for future services, not a postponed compensation scheme. And like Saikawa, Kelly argues the agreements were never formalized. Thus, he says, there was nothing to disclose.
Saikawa, who resigned as CEO in September 2019 and left the Japanese automaker in 2020, said there was concern about succession planning for Ghosn’s eventual retirement as far back as 2010. Kelly’s defense lawyer presented emails showing that Saikawa and Kelly often consulted each other about who, from the next generation of leadership, might step up.
Prosecutors allege Ghosn’s underlings began scrambling to hide his pay in 2010, the year Japan changed its corporate reporting rules to require companies to disclose individual executive pay packages of more than ¥100 million ($942,500) a year. Ghosn, they allege, wanted to avoid scrutiny in Japan and France, where public mores frown on large compensation packages. Both Ghosn and Kelly deny the charges.
Ghosn was believed to be making between $14.1 million and $18.9 million a year at Nissan before the change in disclosure rules, Saikawa told the court. But from 2010, Nissan began listing his annual remuneration at levels only about half that amount.
Prosecutors say Nissan was tracking the gap over all those years and planned to pay Ghosn back after retirement. They allege the total reached $87.6 million between 2010 and 2018. Kelly’s role, according to prosecutors, was finagling a way to make sure Ghosn recouped it all.
Kelly argues that he knew nothing about any scheme to pay Ghosn postponed compensation. His activities were limited to creating a post- retirement package that would retain Ghosn’s services after he stepped down, so that Ghosn would not defect to a competitor.
Kelly and Saikawa worked on three agreements, in 2011, 2013 and 2015, which Saikawa described as updates of essentially the same contract. He said he signed them without deep attention to their details because he trusted Kelly’s expertise in the field of human resources.
