OV9

BBC News - Nissan boss Carlos Ghosn arrested over 'misconduct'
http://www.bbc.co.uk/news/business-46259420

I wonder how much this will affect Nissan and Renault? Hasn't he been the architect of their current success?

Jobbo wrote: ↑Mon Nov 19, 2018 5:27 pm I wonder how much this will affect Nissan and Renault? Hasn't he been the architect of their current success?

He has. Certainly Nissan has grown under his leadership.

$90m is the number quoted

Here one minute... Ghosn the next

I still have no idea how to pronounce his name.

I think it is more or less 'Go-un'.

Carlos Goooooun.

Anyway the only place he’s Ghosn is to prison.

Mito Man wrote: ↑Tue Nov 20, 2018 12:02 pm Goooooun.

Yep...

https://www.bbc.co.uk/news/business-46298999

The whole thing smells. Nissan CEO wanted Ghosn gone and this seems like a very convenient way of making it happen. Also think it would be very difficult for Ghosn to have under reported his income. As one of the top 5 executives at those companies, his income is public record. His taxes would have been done by one of the major accounting firms that would never allow him to under report.

Funnily enough, I was in a meeting with our in-house lawyer today and she was talking about how if you ever need to get rid of an exec all you need to do is go through their expenses. (We’re not getting rid of an exec, it was in relation to us getting a threat of an audit).

NotoriousREV wrote: ↑Thu Nov 22, 2018 9:32 pm Funnily enough, I was in a meeting with our in-house lawyer today and she was talking about how if you ever need to get rid of an exec all you need to do is go through their expenses. (We’re not getting rid of an exec, it was in relation to us getting a threat of an audit).

Not at his level though, I would be shocked if all his expense reports weren't automatically audited.

I must admit, I’m not sure how he is supposed to have misrepresented his salary. Even our little FTSE250 company has to have an independent remuneration committee. There’s checks and balances that are supposed to stop this sort of thing.

I'm guessing he doesn't get paid in cash via PAYE. I expect his remuneration is a complex (normally tax driven) blend of cash and non-cash assets.

The non-cash elements may be liquidated gradually with lock out periods. I guess he could have undereported his 'income' to the Japanese stock exchange by incorrectly declaring what non-cash income he had chosen to liquidate or at what price, or if elements of income were deferred, when he actually received them and therefore what his 'income' was for a particular period.

I'm sure there is a whole host of ways he could have manipulated it - though that isn't to say it isn't a stitch up by the Japanese based off the fact they hated being the larger partner in the alliance but with less decision making power than they thought they deserved.

I admit misrepresenting 'salary' implies something simple but they're probably using that word out of context. Remember the Japanese call all office-workers 'salarymen'!

GG. wrote: ↑Thu Nov 22, 2018 10:11 pm I'm guessing he doesn't get paid in cash via PAYE. I expect his remuneration is a complex (normally tax driven) blend of cash and non-cash assets.

The non-cash elements may be liquidated gradually with lock out periods. I guess he could have undereported his 'income' to the Japanese stock exchange by incorrectly declaring what non-cash income he had chosen to liquidate or at what price, or if elements of income were deferred, when he actually received them and therefore what his 'income' was for a particular period.

I'm sure there is a whole host of ways he could have manipulated it - though that isn't to say it isn't a stitch up by the Japanese based off the fact they hated being the larger partner in the alliance but with less decision making power than they thought they deserved.

I admit misrepresenting 'salary' implies something simple but they're probably using that word out of context. Remember the Japanese call all office-workers 'salarymen'!

Yes but all the non-cash elements would still need to be exercised via the company that issued them (i.e. Nissan) and would be reported as part of his overall comp.

SSO wrote: ↑Thu Nov 22, 2018 8:56 pm The whole thing smells. Nissan CEO wanted Ghosn gone and this seems like a very convenient way of making it happen. Also think it would be very difficult for Ghosn to have under reported his income. As one of the top 5 executives at those companies, his income is public record. His taxes would have been done by one of the major accounting firms that would never allow him to under report.

It does half make me wonder if it's an Olympus style stitch-up of their CEO.

SSO wrote: ↑Thu Nov 22, 2018 10:24 pm

GG. wrote: ↑Thu Nov 22, 2018 10:11 pm I'm guessing he doesn't get paid in cash via PAYE. I expect his remuneration is a complex (normally tax driven) blend of cash and non-cash assets.

The non-cash elements may be liquidated gradually with lock out periods. I guess he could have undereported his 'income' to the Japanese stock exchange by incorrectly declaring what non-cash income he had chosen to liquidate or at what price, or if elements of income were deferred, when he actually received them and therefore what his 'income' was for a particular period.

I'm sure there is a whole host of ways he could have manipulated it - though that isn't to say it isn't a stitch up by the Japanese based off the fact they hated being the larger partner in the alliance but with less decision making power than they thought they deserved.

I admit misrepresenting 'salary' implies something simple but they're probably using that word out of context. Remember the Japanese call all office-workers 'salarymen'!

Yes but all the non-cash elements would still need to be exercised via the company that issued them (i.e. Nissan) and would be reported as part of his overall comp.

Exactly this.

GG, do you imagine he can just award himself stock options, or dividends, or bonuses, or cash without referencing the remuneration committee? It shouldn’t be possible. If he has managed to do this, then the Chairman of the board and the auditors have utterly failed. The shareholders should be holding everyone to account here.

I never said he could 'award' himself any of this. I was talking about properly allocated non-cash assets whose allocation has been signed off. These accusations are about misreporting to a stock exchange body, not misfeasance against the company.

It will be up to him when he elects to exercise stock options or liquidate non-cash assets that have been allocated to him and the whole point of being allocated those assets is that they are not taxable at the point of allocation and may not be reported as 'income' or 'salary' until a subsequent point in time which allows you to maximise use of taxable reliefs that are capped yearly, for example. He then may have manipulated or misreported to the exchange either when he realised those assets or for what price and therefore the 'salary' or income in the relevant periods in which he did so.

I'm not clear what ongoing monitoring the remuneration committee would have post allocation, i.e. as to when he chooses to liquidate those assets. Perhaps SSO is correct that they need to be notified of stock options being exercised but maybe not if they're held by an intermediary or not in a listed company - you're assuming a lot about how Japanese listed companies work and in any event he was supposed to have had the collusion of a director on the board.

Anyway it will be interesting to see what happened when all the facts come out (assuming they do).

GG. wrote: ↑Thu Nov 22, 2018 11:12 pm

I'm not clear what ongoing monitoring the remuneration committee would have post allocation, i.e. as to when he chooses to liquidate those assets. Perhaps SSO is correct that they need to be notified of stock options being exercised but maybe not if they're held by an intermediary or not in a listed company - you're assuming a lot about how Japanese listed companies work and in any event he was supposed to have had the collusion of a director on the board.

Anyway it will be interesting to see what happened when all the facts come out (assuming they do).

Im not exactly sure how Nissan handles restricted stock and option grants but they would definitely need to be exercised through the company. I don't know of a single company which would allow you to transfer stock options to a 3rd party.

It isn’t legally possible to have the options exercised through a 3rd party. And in every regulated market, the company must declare any buying or selling activity by the board. Even roping another exec into his scheme should be picked up by the various checks and balances, so even if Ghosn has been up to no good, others have fucked up so expect further sackings and resignations. If you were a large institutional investor in Nissan, I’d expect you’d be asking some very pointed questions about now, given the 30% drop in value of your investment.