Renault set to strip Ghosn of millions in pay

Carlos Ghosn
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Renault’s Board of Directors is, on Wednesday, expected to deny stock options and other compensation to former CEO Carlos Ghosn worth nearly 10 million euros, sources with knowledge of the matter told AFP.

As part of his pay package Ghosn, who awaits trial in Japan on financial misconduct charges, was entitled to 100 000 Renault shares each year from 2015 to 2017. However, he had to wait four years before each tranche was actually granted, on the condition that he was still with the carmaker and met certain performance criteria.

At current prices, the 100 000 Renault shares Ghosn stands to gain from 2015 are worth some 5.7 million euros ($6.5 million).

However, two sources said the board, meeting ahead of Renault’s full-year earnings release on Thursday, plans to withhold the share grant, arguing that he has not fulfilled his duties since his shock arrest in Tokyo on 19 November 2018. Ghosn is accused of under-reporting millions of dollars in salary as head of Nissan, Renault’s partner in an alliance Ghosn built up into the world’s top-selling auto group. He has denied any wrongdoing, and on Wednesday shuffled his legal team ahead of a trial which could still be months away.

He resigned as CEO of Renault in January as he remains behind bars, having already been stripped of his chairperson titles at Nissan and the alliance’s third partner Mitsubishi.

Since the 64-year-old executive is unlikely to work again after his stunning fall from grace, Renault’s board is also expected Wednesday to withdraw a non-compete clause from his retirement package, the sources said. The shareholder advisory group Proxinvest estimates the two-year non-compete clause would have provided Ghosn with an additional four million euros, but if Ghosn, who turns 65 in March and remains a Renault board member for now, officially retires he may be eligible for an annual payout of 765 000 euros a year after leading Renault since 2005, Proxinvest says.

The French state, which has tangled with Ghosn before over his pay, has said it will do its utmost to ensure Ghosn doesn’t walk away with a lavish payout. France owns a 15% stake in Renault and 22% of its voting rights.

In 2018, Ghosn was forced to accept a 30% pay cut in order to secure another four-year mandate as CEO. As with most CEOs, his pay was a mix of fixed payouts coupled with performance-linked stock grants and cash top-ups.

In 2016 the executive known as a “cost-killer” for slashing outlays and jobs, took home a combined 15.4 million euros from his roles at Renault, Nissan and Mitsubishi, of which seven million euros came from Renault alone.