Ghosn Could Walk Away With Millions From Renault After Quitting
(Bloomberg) -- Carlos Ghosn, who has quit as chairman and chief executive officer of Renault SA, may walk away from the carmaker with millions -- even as he sits in a Tokyo prison charged with financial crimes.
Renault’s board and Ghosn signed a two-year non-compete agreement in 2015 that would kick in whenever he leaves the company. If the board elects to enforce that, he’s entitled to get two times his salary and variable compensation, amounting to at least 5 million euros ($5.7 million).
The fallen chief’s payout may stir controversy in France, especially after recent violent Yellow Vest street protests against economic inequality. Renault’s CGT union stoked the debate, estimating he could leave with 25 million euros. That’s well above what the company intends to pay, a person familiar with the matter said, adding that Renault isn’t likely to award him any performance-related compensation.
A spokesman for Renault declined to comment.
Renault’s policies also say any unvested shares held by Ghosn will be forfeited if he’s dismissed or resigns. That said, it’s not uncommon for boards to strike bespoke agreements with departing executives when the circumstances of their exits don’t match scenarios outlined in employment agreements.
Ghosn would also receive as much as 779,000 euros a year from two Renault pension plans if he retired at 65, regulatory filings show. He turns 65 in March. Pension payments typically aren’t affected by the nature of an executive’s departure from a firm.
Questions over his compensation at Nissan Motor Co. led to Ghosn’s downfall. After a months-long investigation, prosecutors charged him with understating his income by tens of millions of dollars and transferring personal trading losses to the company. Ghosn has denied wrongdoing.
Renault’s shareholders narrowly approved Ghosn’s 7.4 million-euro pay package for 2017, marking a fifth year in a row he came under fire in France for his compensation.
His pay for 2018, during which time he spent more than a month in custody in Japan and unable to run the company, will be disclosed to investors in Renault’s annual report and presented at the shareholder meeting in June, a person familiar with the matter said, asking not to be identified discussing confidential matters.
He could potentially get payouts from Nissan and Mitsubishi Motors Corp., which both ousted him as chairman. Nissan is still working out what its legal obligations are regarding his compensation, a person familiar with the matter said. Nissan is holding a shareholder meeting in mid-April to remove him from the board.
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