Carlos Ghosn Nissan’s Chief Executive Officer earned more than $10 million last year. He is more likely to become the best paid CEO in Japan for the fourth time in five years. Ghosn is also the CEO of Renault SA (RNO).
At the Nissan’s annual shareholder’s meeting in Yokohama on Tuesday, the 60-year old Carlos Ghosn said he was paid a total of $9.8 in salary and bonuses for the financial year ended March 31. This is a 0.7 percent increase from a year earlier. If dividends are included his total earning exceeds 1 billon yen.
It is surprising that what Ghosn earned exceeds four times what his counterpart President Akio Toyoda of Toyota Motor Corp. (7203) earned last year yet Nissan made roughly a fifth the profit made by Toyota in the same period.
Ghosn is among the few foreigners leading Japanese companies. Last year, Nissan’s performance under Ghosn was the poorest among automakers in terms of profit increase, with the exception of Daihatsu Motor Co. which was hurt by recall costs and increased U.S. incentive spending.
Honda Motor Co. President Takanobu Ito received 150 million yen in salary and bonuses while Toyoda was paid 230 million yen, according to the companies. And it is quite ironical that these companies made more profit that Nissan did. If dividends are taken into consideration, the gap in earnings between Toyoda and Ghosn narrows though.
Ghosn said he understands the sensitivity of the issue, but was quick to add that being in Japan should not be a handicap to attract talent, and that Japan needs the best minds and the best talents.
According to Tokyo Shoko Research, in three out of four years since 2010, Ghosn was the top paid CEO when the country’s financial regulator began to require disclosures on compensations exceeding 100 million yen by publicly traded companies.
Toyoda who is the grandson of the company’s founder received 757 yen last year compared to 93 million yen collected by Ghosn in dividends. Edwin Merner said that Toyoda is a big shareholder both directly and indirectly. Edwin Merner is the president of Atlantis Investment Research Corp.
In Japan, Ghosn is the best paid executive, but his peers in U.S. and Europe earn more. From the analysis data compiled by Towers Watson, a consulting firm, the average compensation for CEOs in 2013 rose 5 percent to $17.2 million.
Alan Mulally, the CEO of Ford Motor Co. (F) earned about $23 million in 2013. This is more than twice what Ghosn earned according to Equilar Inc. a Redwood City, California-based researcher. And if February, General Motors CO. (GM), a Detroit-based company said Mary Barra, its chief executive of may receive a compensation of $14.4 million despite starting the job this year.
Figures from Europe indicate that a payment of 8.25 million euros was made to Daimler AG’s Dieter Zetsche in compensation in 2013, while Martin Winterkorn, the CEO of Volkswagen AG was paid 15 million euros. Renault only paid about 2.3 euros to Ghosn in 2013.
These figures clearly indicate that the levels of compensation in U.S. and Europe are higher than in Japan.