Absolute power corrupts absolutely. Mr. Ghosn is now a big liability for Renault to maintain alliance with Nissan. I wonder why Renault still hangs on to him. Legally speaking the matters pose many complicated issues. The Japanese prosecutors have big challenges. We will know more when court proceedings will start.
5
Japanese business is everywhere in America, Japan seems only to be for the Japanese. This story reveals this attitude.
15
You wonder what the Executive Compensation Committee was doing all of this time. What were the Board of Directors doing during all of this? Asleep? Sounds to me that the oversight corporate responsibilities were as much to blame as the greed factor by Mr. Ghosn. However, backstabbing by Nissan is not very honorably either.
10
@George -- Poor corporate governance. There was no executive compensation committee. Executive Suite pay was controlled entirely by 3-Representative Directors: Ghosn, Kelly, Saikawa. It has been reported WSJ & BBN that Mr. Saikawa was kept unaware of the off shore entity funding Ghosns 'off balance sheet compensation'.
Thus the comment: “strong anger and despair” .
16
Tough comments! First, if he's no danger to public safety, it should be horrifying that he's kept in these conditions without a fair trial. Second - one of the best performing investments over the last 10 years has been luxury urban real estate; the $88 million he and the board authorized is probably worth $188 million. So sell it.
23
Some pointers on how to investigate corporate crime in the US and Europe, considering the massive wrong doing behind the GFC, where all bad deeds go unpunished. Good to see the big shot getting the treatment usually dished out to the little people.
8
Globalization ran headfirst into Ethnocentrism/Nationalism, and lost.
6
I believe the authors are incorrectly associated with the books the article mentions: Chinua Achebe is the author of “When Things Fall Apart.” I believe Pema Chodron wrote “Teachings of the Buddha.”
11
It's funny to see a westerner play the race card after having been caught red-handed.
13
Send him home. Take away whatever money they can, legally, but nothing more. This is the end of his career, which is normal, at his age.
He has plenty already.
There is no reason to send him to prison. He is no more guilty than they board of directors at Nissan.
18
Overpaid and undeserved, he is where he belongs. Exactly what justifies 240 times higher pay than the average or lowest paid employees. Other countries should follow suit for the extreme greed and executive pay scrutiny especially in the US.,
30
A plot to get higher compensation than the company board decided is a theft, and given the amount, not a petty theft. I am not sure if Ghosn is treated unusually harshly: Japanese legal system is harsh. That said, treating foreigners differently happens everywhere, USA being a premier example. As USA is a dominant country in the world, our vices are copied.
20
@Piotr Berman
Japan's legal system won't treat anybody differently be it Prime Minister of Japan or Johns on the street. There is no resort hotel like jail cell.
4
He thinks he's underpaid, and the company and the corporate culture of Japan think he's overpaid. So he creates a workaround to defy the obstacles . . . and ends up arrested. He shouldn't be surprised, and I doubt anyone there wants to cut him any slack in the wake of his arrogance.
The daughters might do better to stay silent, as they were advised in Japan. The insights they lend this article do nothing to garner sympathy or support for their father's position.
54
According to the article 17 people search Ghosn's apartment. How many of them spoke or read French or English or Portugese?
4
Totally disappointed in the Japanese authorities' communism/mob style of legal system. I have to admit, I have misunderstood Japan business & government completely - thought they are part of the capitalism and the free world. Didn't realize how behind they are in their thinking. I am in the market for a new car soon and Nissan is surely OFF my list. I am boycotting Nissan until they "upgrade" themselves and show more civilization in this matter.
10
Behind in their thinking or ahead?
10
@Macro
there's Nothing to do with capitalism nor communism. They have neither the privilege class of communism nor the Old Boys Club of capitalism "period."
3
He will not be missed by anyone but his greedy family. There are dozens, if not thousands who can replace him, and not all will be as needy as Carlos Ghosn obviously is.
21
Why do public shareholders let corporations get away with this nonsense? Are they in on it too?
8
“The widely held consensus was that he would fail, that Nissan wasn’t worth saving and it couldn’t be done,”
This is a case that combines economic and cultural chauvinism with resentment over the perceived unfairness in profit sharing. Japan (and Korea) would never ever treat one of their top executives in this fashion. The fact that Ghosn saved Nissan from bankruptcy clearly counts less than the embarrassment that this was done by a gaijin.
20
I really don’t care if a corporation decides to provide luxury houses to its CEO as part of a compensation package, so long as it is done openly and legally. The moment an action needs to be hidden, you can be certain that its perpetrators are rotten. Daylight is a superb illuminator of character.
That said, it is obvious that Ghosn is being punished under a harsher standard than other Japanese coporporate criminals, including his #2. And that ain’t right either.
27
Luxury houses to CEOs is excessive and unnecessary. I care. As should we all.
10
@Michael
Japan has sent one of the Prime Ministers to the same treatment in 1970's. Their legal system is blind over who is what when it brings them to Justice.
9
One thing I can't blame him for is driving a Porsche instead of a Nissan.
19
@Cazanueva
He could had driven and Infiniti.
3
I wrote a scene in a book I authored, “In Jake’s Company” - which deals with Ghosn-like greed in the US pharmaceutical industry - where one Ghosn-type says this to one of his peers: “People use money to hack trails through whatever’s between themselves and greater riches, and then those trails disappear just like empires, companies, and guys like us do.”
In the real world, and especially in Big Pharma, the Ghosn’s simply do not get caught. The self-dealing that is done among top-echelon executives in the pharmaceutical industry is a significant contributor to the US’s ridiculously high prescription-drug prices. I think what happened to Ghosn could only have happened in Japan, which is, of course, to Japan’s credit. I’d love to see the authors of this story get an assignment to do a deep dive into American Big Pharma now, and start with the companies’ uses of their private jets: a lot can be learned from reviewing executives’ itineraries.... I suspect that any CEOs and COOs who’ve read this story have gulped and shivered a bit as they saw themselves in Ghosn’s “shoes,” jail cell, etc...
39
"Over 19 years, the company put these things in place to maximize his productivity,” his eldest child, Caroline Ghosn, 31, said in an interview"
The 'these things' being expensive houses and apartments all over the world for this CEO parasite to live in during his travels.
The 1% know little of the plight of the 99% but it seems the children of the 1% know even less.
We have our own 'children of the 1%' little monsters who have destroyed and are destroying America even now - Charles and David Koch who were handed a fortune by their wonderful Dad Fred Koch, our current President CEO, Trump, our previous President CEO Dubya scion of the now departed GHW - look for more to come in the near future courtesy, the Gates, Jobs, Cooks, Buffets, Moonveses, Pelosis, Clintons etc.
The viciousness of the second generation makes their father's and mothers look like Red Cross volunteers.
Looks like the junior Ghosns are running true to form. One wonders what 'things' they might demand from Society to make them more productive.
32
Doesn't matte if he was underpaid... Issue here is that he embezzled Corporate money for his personal use with illegal manner. (including evasion of taxes) If this doesn't become a problem then the country and company is corrupt.
14
@Micro Per my study of Accounting 101 at a US University, I don't think deferred payment is the same as embezzlement. On the same token, in the US we defer tax by putting our $ in IRA. When we defer tax this way, we do not commit tax evasion.
11
I got stuck with an Altima at Palm Beach Avis. What a terrible car!
3
Since we can’t comment on the other article featuring Ghosn’s daughter, I’ll do so here: cry me a river.
27
@JJ - the kids are the worst and clueless (and oblivious that there are). The eldest ‘entrepreneur’ ghosn with her ‘startup’ funded by dad’s friends, which pretty much does nothing, and the second daughter who ‘built her jewelry company from the ground-up”. Y’all aren’t fooling anyone.
21
The way this incident is viewed shows the deep divide in perception between East and West (and I say this as someone from the East). For an Asian, this is a clear attempt by the Japanese to depose a leader who threatened to turn a national champion like Nissan into a "globalized company," that is to say, turn it more French, focus on the American market, not the Japanese. This has absolutely nothing to do with justice and everything to do with politics and national pride. Everyone in Asia knows this. No one, absolutely no one in Asia, will give any credence to the argument that this is about Ghosn's wrongdoings. The fact that the Western media even contemplate that possibility is laughable. Japan thinks the French can be pushed around, and so far, they've been proven right. They see Macron, the Gilet Jaune movement, and they say, well, this is a good time to strike; let's weaken the French hold on Nissan. We've used them. We don't need them anymore. Notice they let the American guy go.
44
@Judge exactly right. Really nothing to do with justice. More about politics and national pride. No doubt Ghosn was warned perhaps indirectly so he didn’t hear it. To have the Japanese police in your home for over six hours is not about a warrant: it’s a message.
13
Who’s the American guy?
2
@JJ, Greg Kelley.
1
Power and ambition come together. When $20M is not enough?. Something happens in corporations around the world, you lay off workers to save money, but the saving is wasted in vanity and corruption, and then everything falls apart.
12
I get that this fellow is no angel, but the tactics being used by the Japanese prosecutors seem, well, a bit overly aggressive. Is this really necessary to the investigation?
7
Yes he is a flight risk, and high powered lawyers getting the rich and powerful off is a US standard not global standard.
6
Yes, Ghosn probably saved Nissan - but ONLY though cost-cutting. The products that "saved" Nissan were already in the pipeline when he arrived on the scene. I know - I owned one of them (2001 Maxima). It was an excellent car and I got wonderful service from both it and the service department. After 12 years and over 100K miles, only Hurricane Sandy could kill it.
Unfortunately, since Ghosn did his slashing, Nissan quality has suffered immensely. The cars are nowhere near as well built or reliable as mine was. Nissan can't even compete with Mazda quality these days, much less Toyota/Honda's. Yes, his slashing saved the company, but at what cost?
13
@WillyD I concur. I still drive a 2001 Pathfinder that has over 200k miles on it. Nissans from that era were very well made and had excellent design. I understand that those cars were overbuilt and the profit margins were small but I would not hesitate to buy another from that era. I see more early 2000's models still on the road than late 2000's.
I'm currently shopping for a new car and Nissan is not on my radar. If Nissan cannot retain customers like myself, one wonders how long a turnaround can be sustained.
5
I am not familiar with the charges against Mr. Ghosn and their validity. But the repeated extensions of his arrest indicate that Japan is still far from the Occidental respect of habeas corpus and it is still rooted in the pre-1860s customs when almost anyone could have been imprisoned indefinitely and even executed by order of various authorities.
In historical samurai films, jailed prisoners were forced to be washed from buckets of cold water once a week. I hope that Mr. Ghosn does not have to suffer the same ritual.
9
Clearly Ghosen was trying to approach the kind of compensation he would have received had he been head of a US automaker. He did after all increase Nissan's market value 500% which is a lot more than many US auto execs have done. Had Nissan paid him what he was worth he might not have needed to go through the whole "deferred compensation" mess.
8
@Trillium Did you actually say, "...he might not have needed..."? Seriously, "needed"?
15
No one is worth that much. That is a fundamental failing of humans...to think one person deserves that much money.
33
@Trillium Overpaid executive salaries have gotten out of hand with just that type of justification. "Others are getting paid that much." There is no justification for salaries with a ratio more than 20 to 1 above what the lowest paid worker in a corporation is paid. There is an entitlement culture at the top of too many USA corporations that perpetuate this concentration of wealth in the hands of a few.
45
I do not know if Carlos Ghosn is guilty as charged. But the conditions of his incarceration are disproportionate to the misdeeds he is accused of and far exceed the punishment previously imposed on Japanese corporate executives accused of similar offenses. As reported in your article “The Rise and Fall of Carlos Ghosn”, Ghosn is being kept in a “16-by-10-foot cell with a tatami mat, a toilet in a corner and the lights always on”, and he is being denied several ordinary items such as a mattress, family photos, pen, paper, and dental floss. Surely, in this technological age, there are other effective means of monitoring the accused and ensuring that he does not present a flight risk. This treatment of Mr. Ghosn leaves the impression that the Japanese legal system has one set of rules for nationals and another for foreigners, or even worse, that the Japanese authorities are more intent on humiliating an outsider than on serving justice.
56
@MN
Bingo. He is being made a “Private Slavic” and it sure isn’t just. You put it perfectly.
2
We need to see more corporate executives in small cells where the lights stay on 24/7 and there is no bed. Bamboo splinters under fingernails would be good as well. PS: I used to think Nissans and Toyotas were more or less equal in quality and reliability (have owned several of each). Last Nissan I owned, slapped together during the Ghosn reign, convinced me to never buy another one.
28
@Ernest Murphy, Even Meng Wanzhou, CFO of Huwaei, has been treated slightly better
in Canada than Ghosn in Japan. she has been released on $10 m bail, wears ankle
bracelet and a security guard accompanies
her all the time. No bankster was arrested
in USA. It pays to be a big donor to the
politicians. Japanese politicians are a
corrupt lot. Ghosn should have wined and dined them with stuffed manila envelope
on their birthday. Now he will be playing
bamboo flute.
5
This is a global corporation. It's time for a reality check though. When the highest paid player (Trout) in baseball makes 33 million dollars, it's a bit absurd to complain about the CEO of TWO automakers raking in under 20 million dollars. Heck, the Boston fans have praised Tom Brady for taking less money than he could have demanded at 15 million dollars with another potential 5 million in incentives so they could have more salary cap space.
Why are they paid those exorbitant amounts? Because they make money for the team by filling seats. Ghosn got paid well because he brought Nissan back from the brink. Should we ask Mike Trout to donate a large portion of his salary back to the lowest paid workers in the stadiums he plays in?
As they say, "Hate the game not the player ".
31
It will take players to change the game. So I hate both.
10
Gordon Gekko summarized the dark side of corporate thinking - “Greed, for lack of a better word, is good.” The degree to which greed is permitted is squarely the responsibility of corporate boards.
How many Nissan board members have been arrested?
28
Global swashbuckler. Unalloyed greed. Slippery accounting. Byzantine legal system. It reads like a TV miniseries: Game of Gosnes.
My view is that the Japanese legal system is an accessory to a coup by the heir apparent of Nissan.
12
Excellent bit of reporting. Thank you.
13
@Nick - i actually thought the ghosn 2 pieces were puff pieces. My expectation of nyt investigative journalism would be to dig deeper like the WSJ, follow the money trail.
Also to Caro G - i know it’s the holiday, but you need a new PR team asap.
2
I think they need to rebrand.
Perhaps a name change.
How about 'Datsun' ??
Has a nice ring to it, no? (;>))
18
@Chris Morris - Nissan actually already revived the "Datsun"name back in 2014 or so; the brand is being used to sell low-cost cars in emerging markets. Kind of a counterpart to Nissan's Infiniti nameplate, except on the low end of the market.
4
He deserves it even if only for the hideously ugly cars Nissan builds.
10
According to an article in Automotive News, Ernst & Young ShinNihon questioned Nissan's management several times about purchases of overseas homes for personal use and stock appreciation rights that were conferred on him but the automaker said the transactions and financial reporting were appropriate. If true, this suggest that Nissan previously signed off on the same activities they now consider wrong and illegal.
I hope this story continues to be covered by multiple news sources; it's important the full picture of this story is brought to light.
33
Nissan signed off on it, or a lesser executive signed off on it on Ghosn’s direction?
5
Mr. Ghosn didn’t do this alone, he was enabled by a canal of board members and fellow executives who fulfilled his demands. And they obliged him for as long as the financials were strong. But when the company faltered, they turned on him. I guess you can’t rob the corporate treasury when it’s empty.
20
I'm pretty sure I would "maximize my productivity" if a company spent 88 million dollars on mansions around the world for me to use sporadically throughout the year.
Corporate greed. Many executives think they are worth so much more than they are. And the corporate world buys into the idea that to get the "best" heads they need to pay outrageous salaries, plus bonuses, plus, plus, plus.
115
There are definite cultural norms in Japan around greed and public flaunting of wealth. Mr Gohsn and his family did not seem to appreciate this, and are suffering as a result. I’ve often wondered if Nissan could have been brought around in manner that was more culturally sensitive. Mazda, for example, turned itself around in the 1980’s without the drama we’ve seen with Nissan. In the meantime let’s hope that there is an acceptable way for Mr Gohsn to be allowed to be freed from jail and leave the country, to end this sad chapter in corporate history.
9
Corporate greed never changes. They start off humble, then want to own the mountain. Look at Barra of GM, she needs $22 million to run her household. Pitiful. But it is true, PYA is basic at those levels. Ghose's greed caught up with him, it always does unless you leave while on top, which he didn't.
47
I wish we had some Japanese values in our corporate culture---and when those values are violated---as happened on a grand scale in 2008---some of these masters of the universe end up in a cell---
90
Hear, hear.
13
Be careful what you wish for. Japan has its own issues that are coming to the forefront of everyday Japanese lives: people are choosing to stay single and childbirth rates have plummeted; suicide rates, always high, continue to rise; young adults are cobbling together part-time jobs b/c companies aren't hiring; sexism, misogyny and prejudice run amok.
7
100 days a year flying around the world in a corporate jet? What a waste of shareholder money and contribution to global warming... and justified by his company-paid palaces all around the globe. Power does seem to corrupt, over and over.
69
When did NYT become corporate apologists? Was this article and the other about how his daughters perceive his arrest as an internal revolt both paid for by the Ghosn family? Sure maybe I’m biased; It’s appealing, the idea that such an outrageously insatiable fellow may have to actually connect with the planet Earth. Are we supposed to feel bad that he’s lost some weight while in detention? Japan should be allowed to discourage his breed as they like. We suffer from an unreflective American sensibility that greed is good.
87
Yes, coupled with the article about the daughters, this is waaaay too much.
23
One of the photos is courtesy of the Ghosn family...so, yes, seems bought and paid for.
44
Carlos Ghosn stands accused of criminal wrongdoing. As the story has unfolded, it looks like a few episodes of “House of Cards,” with Kevin Spacey and Robin Wright and could be a setup. Your comment and those like it show no interest in discovering what’s actually happened here.
3
Those dinner reservations are impossible for mere mortals, I’m sure his kids didn’t cancel.
29
There’s more to the story here. Sorry, making that much money and then having the company pay for your 5 luxury residences (one in a location not even remotely integral to your work) is entirely inappropriate. Even if the company agreed to it (as his daughter claims), why did he ask for it? He had enough money to pay himself. Again, more to the story here.
And kudos to the Japanese if they view the greed of American-style CEOs as abhorrent.
149
Do not make the Japanese out as the good guys. They looked on enviously as Ghosn asked and got what he wanted. The entire drama is about greed: Ghosn's and those who wanted what he had but would never get it b/c of "protocol". This is classic Japanese tatemai. It's the urabanashi that tells the real story, and we're not reading about that-anywhere.
9
You can't be greedy like that. He cut a lot of employees which is total opposite of Toyota which doesn't cut employees even when in recession.
74
@Asian man In the capitalism world, how does a company pay its employees? By making profit. If companies don't make $, they either die (with all employees losing all their jobs) or have to change their operations to make profit. Therefore, changes in operations (including cutting costs, improving productivity, etc) are sometimes simply a necessary measure.
1
@Macro
I believe Asian man's point is not so much that a company needs to make sacrifices but that, in light of the comment being made in reference to this article, that the American style emphasizes worker sacrifices = layoffs, whereas the Japanese style emphasizes more equitable sacrifices = less outrageous executive pay packages. The Japanese style in this description has its (yes Captalistic) benefits. Committing to one's workforce even when times are tough engenders greater dedication by the workers in return, leading to greater productivity. The workers feel valued. American workers are made to feel inferior, disposable. In return, they don't invest as much pride in their craft.
16
Well said, George. You get it. Marco doesn’t.
6
Having seen how Nissan has treated Mr. Ghosn, I will never, ever buy a Nissan car.
--After all he did for the company -- shame on them.
There must have been a more humane way for Mr. Saikawa to restructure the power balance if that is what he wanted.
Disappointment too, at Japan's abysmal legal process, and its feudal resentment towards non-Japanese.
To all those overseas businesspeople who might want to invest in Japan, I say, beware.
43
@Susan KOibuchi
It sounds like he did himself no favors, it sounds (from this article's account) as if he basically thumbed his nose at the cultural norms and he's now receiving harsh treatment in return. Had he shown more sensitivity to the concerns expressed, the current circumstances might be different.
It appears he didn't KNOW or didn't CARE enough about the culture in which he was working. If he didn't know (doubtful), he's the wrong CEO for this company. If he didn't care, then perhaps he made bold moves he felt were necessary and the chips fell where they fell.
Either way, we're seeing the consequences of HIS choices, and the results of HIS actions. I doubt he can be too surprised by where this has led.
6