TOKYO Nissan Motor Co Ltd (7201.T) and Renault SA (RENA.PA) CEO Carlos Ghosn is set to receive a third salary after Nissan-controlled Mitsubishi Motors Corp (7211.T) on Wednesday approved the Frenchman as its chairman along with a tripling in compensation for board members.
Shareholders voted in favor of raising the ceiling on combined annual compensation for Mitsubishi's 11 internal and external directors to 3 billion yen ($26.06 million), including 2 billion yen in salary and 1 billion yen in stock options.
Mitsubishi has revamped top management and appointed Ghosn to head its 11-member board after Nissan in October took a 34 percent controlling stake in Japan's sixth-largest automaker, which is struggling to recover from a mileage-cheating scandal.
At a special shareholders meeting, some raised concerns about bumping up executive pay while Mitsubishi was on track to post an annual net loss after it overstated the fuel economy on many of its domestic models.
"We didn't think it was appropriate to reduce compensation while prioritizing the company's recovery," CEO Osamu Masuko told shareholders.
The automaker said it was increasing its top-level pay scheme to incentivise executives to improve the company's management and attract talent.
"Compensation (excluding stock options) will not be doubled if we don't return to the black next year, for example. Because compensation will be merit-based, if our performance is not good, director salaries will reflect that," he said.
Mitsubishi now has the firepower to raise compensation after paying its previous board of 10 directors 423 million yen in the year ended March, below the maximum 960 million yen previously set aside for such compensation.
The company has yet to determine salary and benefits for Ghosn, and a breakdown of Wednesday's voting was not immediately available.
As the head of the Renault-Nissan automaker alliance, Ghosn received combined compensation of around $17 million in 2015 despite a vote by Renault shareholders against his pay package of 7.2 million euros ($7.65 million) earlier this year.
Executive pay is a major political issue in France, whose government commands more than 18 percent of voting rights in Renault. Ghosn last month told Reuters he expects the government to oppose his pay package in 2017.
Ghosn is already among the top-paid executives in the auto industry, which also include General Motors CEO Mary Barra, who received a combined $28.6 million in salary and perks last year, and Ford CEO Mark Fields, who was paid a total of $18.6 million.
($1 = 115.1100 yen)
($1 = 0.9407 euros)
(Reporting by Maki Shiraki and Naomi Tajitsu; Editing by Christopher Cushing)