Renault Launches Audit of Ghosn’s Pay

Renault SA has opened an internal audit into the compensation it paid Chairman and CEO Carlos Ghosn.

The carmaker says its probe will be headed by Claude Balard, director of ethics. The announcement comes a week after Ghosn, who also had been chairman of Nissan Motor Co. and Mitsubishi Motors Corp., was removed from both posts. He was arrested in Japan on Nov. 19 on suspicion of understating his compensation and misusing corporate assets at Nissan.

Greg Kelly, Nissan’s board member responsible for human resources, also was arrested as a suspected co-conspirator. Both men remain in jail but neither has been charged with any crime.

Renault’s board agreed last week to retain Ghosn as its chairman but appointed Chief Operating Officer Thierry Bollare as acting CEO. Ghosn also remains chairman of the Renault-Nissan-Mitsubishi alliance.

Renault’s board said last week it would take no further action pending details about a continuing Nissan investigation into Ghosn’s compensation, use of luxury homes paid for by Nissan and other matters.

The crisis appears to have surprised Renault and the French government, which holds a 15% stake in the carmaker. Media reports note that suspicions run high in France that Ghosn’s ouster at Nissan was a coup d’etat led by Nissan CEO Hiroto Saikawa.

The real issue is that Ghosn had abused the enormous power he had amassed over the three carmakers and their alliance, Saikawa insists. He also has signaled that Nissan has become impatient about Renault’s dominance over the 19-year-old partnership, in which Nissan now contributes about 60% of sales.