Report: Renault-Nissan Ponders Back-Channel Bonus Plan for Execs

The Renault-Nissan alliance has developed a scheme that would enable it to sidestep limits on compensation to CEO Carlos Ghosn and other top executives.

The plan was developed by London-based private investment banking firm Ardea Partners. Reuters says the year-old firm was founded by Christopher Cole, an ex-Goldman Sachs banker and close associate of Ghosn to provide strategic advice to “CEOs, founders and boards of directors of leading global enterprises facing complex challenges.”

The scheme is intended to reward alliance managers for efforts to encourage further synergies between the companies without requiring the carmakers to merge. Renault currently owns 44% of Nissan, and Nissan holds a non-voting 15% stake in Renault. Both companies favor closer equity ties. But the French government, which owns 20% of Renault, has opposed any change in the alliance’s structure.

Reuters says the proposal would create a new Dutch-registered company that is wholly owned by an independent foundation. The company would receive an 8% share of calculated savings that result from collaboration between Renault and Nissan, then distribute it to executives.

The payouts skirt French rules that limit executive compensation. The bonuses would be entirely separate from existing compensation packages for the managers. They would not need to be reported to shareholders of either carmaker, and the payouts would be exempt from French payroll taxes.

Reuters notes that the plan is certain to create a firestorm of protest friction between Ghosn and the French government.