How Carlos Ghosn Went From Corporate Superstar To Fugitive
AILSA CHANG, HOST:
This week, two Americans apologized in court in Tokyo after pleading guilty to helping Carlos Ghosn escape Japan. Ghosn is the car company CEO who made a dramatic, Hollywood-style escape to avoid trial for financial misconduct. He spoke recently with Harvard Business Review. Here's Curt Nickisch with that story in collaboration with NPR's Planet Money.
CURT NICKISCH, BYLINE: It all started in 2018, when Japanese authorities arrested Carlos Ghosn and charged him with hiding his pay and misusing company money. As the CEO of Nissan, Ghosn was used to jetting around the world and staying in palatial homes on the company dime. Now he was stuck in a prison cell.
YANN ROUSSEAU: So he was wearing some sport pants and a big sweater.
NICKISCH: Yann Rousseau with the French business newspaper Les Echos visited Ghosn in prison in Tokyo.
ROUSSEAU: His hair was a little grayer and messier, so he was like that. But he was still very classy.
NICKISCH: Ghosn was probably the most famous CEO in Japan. He was so successful at making Nissan profitable again that he took on a second job as the CEO of Renault, the French carmaker, and both companies paid him well because they didn't want to lose him. But Rousseau says Ghosn's high pay was not popular in France.
ROUSSEAU: It's a scandal for the French. I mean, French are complaining - the workers, the trade unions, the governments. It's too much.
NICKISCH: And in Japan, Ghosn's compensation may have led to his downfall. Executives there traditionally don't get huge pay packages. Here's former ambassador Sadaaki Numata.
SADAAKI NUMATA: It has been said about Japan's culture that a nail that sticks out gets hammered down very quickly. If somebody has too much money, he does stick out.
NICKISCH: In 2010, Japan introduces a new law that requires disclosure of executive salaries. It comes out that Carlos Ghosn made $10 million that year at Nissan. The CEO of Toyota, Japan's No. 1 automaker, didn't even make $1 million. So for years, Ghosn defends his salary to Nissan shareholders and to journalists. Then in 2018, Carlos Ghosn is arrested. Japanese prosecutors paint Ghosn as a greedy executive who was scheming ways to pay himself millions of dollars out of the public eye. But the trial never happens. Ghosn jumps bail. He stows away in a music equipment box that's wheeled onto a private jet, and he flies to Lebanon, where Japanese authorities can't touch him. He boasted about it when we spoke with him.
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CARLOS GHOSN: It was successful because it was very audacious. Nobody would have suspected that you would dare do something like this.
NICKISCH: Ghosn says he's innocent and that he fled Japan because he felt he would not get a fair trial. He admits he broke Japanese norms as CEO, but not Japanese laws, and that he deserved high pay because he delivered results.
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GHOSN: And there's a market for CEO. And what is fair is what the market is ready to pay for CEOs. So I'm much more in line with compensation philosophy like the American way of things than the Japanese or the French way of things.
NICKISCH: Ghosn continues to deny any wrongdoing, but his legal troubles are not just in Japan. He can't fly anywhere. There's an international arrest warrant out for him. French investigators recently questioned him about his tax filings. And in May, a Dutch court ordered him to give back $6 million of his pay. For NPR News, I'm Curt Nickisch.
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CHANG: And Curt Nickisch is a host of the podcast "HBR IdeaCast," which produced this story with Planet Money. Transcript provided by NPR, Copyright NPR.