PARIS — An internal investigation by Renault SA found that CEO Carlos Ghosn’s compensation at the French carmaker was legal, leading the board to keep him at the helm despite facing charges in Japan for financial crimes.
A preliminary review of of the years 2015 and 2018 found the jailed executive’s pay also adhered to French law and industry recommendations, Renault said in a statement Thursday. The board also said it doesn’t “have information concerning Carlos Ghosn’s defense.” Renault shares rose as much as 3.9 percent.
Renault’s probe into the pay package of Ghosn was a response to the executive’s shock arrest and incarceration on Nov. 19 in Tokyo for under-reporting compensation at partner Nissan Motors Co. Its initial findings mean his position at the top of Renault remains in limbo after the carmaker put in place an interim chairman and CEO but haven’t removed him. Ghosn was ousted at Nissan and Mitsubishi Motors Co., the third partner in their globe-spanning alliance.
Ghosn’s reported compensation totaled about $15 million annually, on average, during the five-year period through 2015 that has been investigated in Japan. That total includes what he was paid by Nissan and Renault.
He and Nissan’s indictment was for understating the high-flying executive’s income by $43 million, as Tokyo prosecutors pushed ahead with the criminal investigation that has shaken the global auto industry.
While he’s less well paid than some of his global peers, Ghosn’s compensation has been a matter of controversy in France, where there is significant oversight of executive pay. In June, investors narrowly approved his package for 2017, despite opposition from the French government, Renault’s most important shareholder.
Renault’s board was briefed Thursday by the company’s lawyers on the reasons why Ghosn was charged, according to the statement. Renault had complained about being kept in the dark since the executive was arrested and the board requested that the carmaker’s lawyers continue to review and assess information provided by Nissan.