Nissan Motor Co. Chief Executive Officer Carlos Ghosn received 982 million yen or $11.46 million in total compensation last fiscal year, including salary and stock options, as the Japanese carmaker captured a record market share.
Ghosn, 57, who got a 10 percent increase in the year ended March, announced his compensation at Nissan’s annual shareholder meeting today. He is the highest-paid leader among Japanese companies that have disclosed executive compensation, according to Bloomberg data. He was followed by Sony Corp. Chairman Howard Stringer, who made about 863 million yen in salary, bonus and stock options, the electronics maker said yesterday.
Ghosn’s pay is lower than the average for global automotive companies, estimated at about $15.3 million by Towers Watson & Co., a U.S. benefits consultant. Ford Motor Co. CEO Alan Mulally earned the most in the industry with about $26.5 million in 2010. Publicly traded Japanese companies are required by financial regulations to disclose compensation for executives who earn more than 100 million yen.
“Western companies see the need to provide higher incentives to top management than Japanese companies do,” said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo. “They understand that well-performing management leads to good earnings results and they maintain adequate pay to make sure top managers don’t leave for another company.”
Nissan shares rose 2.7 percent to 847 yen at the 3 p.m. close in Tokyo, the highest since March 4.
Toyota Motor Corp. President Akio Toyoda was paid 136 million yen in the year ended March 31, including a 24 million yen bonus, according to a filing to Japan’s finance ministry last week. Honda Motor Co. President Takanobu Ito earned 130 million yen in the same period.
Toyoda’s pay wasn’t listed a year earlier, indicating he earned less than 100 million yen at the time. Ghosn was paid 891 million yen in the year earlier period.
Nissan’s senior vice president of marketing and sales in Europe, Simon Thomas, left this month to take a job at Volkswagen AG, Ghosn said in an interview.
“Nissan is obviously targeted not just by Japanese companies, but foreign companies going after talent,” Ghosn said.
For his role as CEO of Nissan’s alliance partner Renault SA, the executive was paid 1.2 million euros ($1.7 million) in 2010 after dropping claims to his bonus following a mishandled spying investigation.
Nissan, Japan’s second-largest automaker, boosted global vehicle sales 19 percent to 4.185 million in the year ended March 31 as China sales surged 36 percent and North American deliveries gained 17 percent. The carmaker’s global market share rose 0.3 percentage points to a record 5.8 percent.
Japanese automakers are recovering from the nation’s record earthquake on March 11, which disrupted auto production. Nissan expects to resume full output worldwide by October, the fastest recovery among the nation’s largest automakers.
Nissan said this month it would pay its top 14 executives and auditors an average of 126 million yen for the year ended March 31. Average pay for nine executives excluding corporate auditors rose 32 percent to 186.4 million yen, more than twice the levels at Toyota and Honda.
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. In the same period, Toyota’s profit fell to the lowest in 18 months to 25 billion yen as sales declined 12 percent.
Non-Japanese officials account for 44 percent, or 43 of the top 97 positions at Nissan, and four out of nine, or 44 percent, of its executive committee members, according to the automaker. The top 97 positions include Brazilian, Portuguese, British, French, Dutch, American, Indian, German, Italian, Spanish, Canadian and South African executives, Nissan said.
“There are no other automakers in the world that have this kind of diversity,” Ghosn said. “Because our executive team is so diverse, for compensation, we benchmark some of the similarly diversified companies, and the reason is simple: we compete against these companies for the same pool of multicultural, highly educated and highly mobile talent.”
Ghosn’s total compensation was 0.3 percent of Nissan’s net income for the year ended March 31, compared with an average of 1.4 percent for CEOs at S&P 500 companies, according to Equilar Inc., a Redwood City, California-based executive-pay researcher.