Nissan’s Top Executives Paid Twice as Much as Toyota, Honda

Nissan Motor Co., Japan’s second- largest automaker, handed its directors average pay that was more than twice that of its rivals Toyota Motor Corp. (7203) and Honda Motor Co. for the fiscal year ended in March.

Average compensation, including bonuses, for the 14 executives and auditors was 126 million yen ($1.6 million), the Yokohama-based company said in a notice today before its annual meeting on June 29. Average pay for nine executives excluding corporate auditors rose 32 percent to 186.4 million yen.

The announcement comes after Nissan posted net income of 31 billion yen for the three months ended March, as global vehicle sales rose 16 percent to 1.2 million. For the same period, Toyota’s profit fell to the lowest in 18 months to 25 billion yen as sales declined 12 percent.

“Nissan’s compensation seems to be based on a short-term basis and reflects how Nissan’s earnings are doing in recent periods,” Satoru Takada, an analyst at TIW Inc., said in a telephone interview.

Nissan determines the compensation for each of the directors by reviewing their performance and going through other processes, according to the carmaker’s financial statement. Mitsuru Yonekawa, a spokesman for the carmaker, declined to elaborate.

Along with the pay, Nissan plans to grant seven executives a total of 194 million yen worth of share appreciation rights, the statement said.

‘The Best Talent’

Toyota, Japan’s biggest carmaker, paid a total of 1.6 billion yen in salary to 38 directors and corporate auditors, for an average of about 41 million yen per executive. The company paid 27 executives bonuses of 340 million yen, about 13 million yen each.

Honda paid a total of 781 million yen to its 25 top executives, each with an average compensation of about 31 million yen. Executives got bonuses of 372 million yen, about 15 million yen each.

Carlos Ghosn, Nissan’s chief executive officer, is the best-paid leader among Japanese companies that declare executive compensation, according to data compiled by Bloomberg. He earned 891 million yen in 2010, the data show. By comparison, Ford Motor Co. (F) Chief Executive Officer Alan Mulally earned $27 million in 2010.

Ghosn defended Nissan’s pay structure last year by saying the company wants shareholders to have “the best performance possible with the best talent.”

Nissan fell 0.5 percent to 778 yen at the 3 p.m. close of trading in Tokyo, while the benchmark Nikkei 225 Stock Average added 0.1 percent.

To contact the reporters on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net; 堀江政嗣 in Osaka at mhorie3@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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