Why Renault Flagged Ghosn's Versailles Wedding for Possible Misconduct
Renault SA’s board is likely to scrap severance and deferred stock awards to former Chairman and Chief Executive Officer Carlos Ghosn, two people familiar with the matter said.
Ghosn probably won’t benefit from a non-compete agreement he signed with Renault in 2015, worth about 5 million euros (US$5.7 million), said the people, who asked not to be identified discussing private matters. Renault is also expected to withhold shares awarded in 2014 and 2015 that were conditional on his staying at the company, the people said.
Until his Nov. 19 arrest on allegations of financial misconduct, the jet-setting executive led an automotive empire that stretched around the globe. He not only ran Renault, but also held the chairman post at Nissan Motor Co. and Mitsubishi Motors Corp., its alliance partners. He quit Renault last month, replaced as chairman by Michelin chief Jean-Dominique Senard, and as CEO by Thierry Bollore.
A Renault spokeswoman declined to comment. French daily Liberation first reported Wednesday that the board, meeting Wednesday ahead of the company’s annual results Thursday, was unlikely to award the payouts.
Renault’s CGT union estimated last month he could leave with 25 million euros. That was well above what the company intended to pay, a person familiar with the matter said at the time, adding that Renault wasn’t likely to award him any performance-related compensation.
Questions over his pay at Nissan led to his downfall. After a months-long internal investigation that was kept from Renault, the Japanese company alleged that he had understated his income for several years. The Japanese carmaker on Tuesday took the unusual step of booking a 9.2 billion yen (US$83 million) charge to reflect payments due to Ghosn that he accumulated for the eight years ending in 2017. Ghosn has said that the payments weren’t certain, so didn’t need to be declared.
In Tokyo on Wednesday, Ghosn changed his legal team, hiring Junichiro Hironaka to help him with the “trial phase” of his case. The previous lawyers, including former local prosecutor Motonari Otsuru, said they notified the court they no longer will represent him. Otsuru’s team failed to win bail for Ghosn as he awaits a trial that could be months away.
The executive is also under scrutiny at Renault, which flagged last week that Ghosn may have made improper use of a company sponsorship deal to help pay for his Marie Antoinette-themed wedding party at the Chateau de Versailles. Ghosn has since offered to repay the funds. The French automaker is also probing the pay of its top executives, including Ghosn, and has agreed to an audit of the finances of RNBV, the Amsterdam-based unit that manages its alliance with Nissan.