Nissan's Carlos felt stars deserved big pay. His accusers thought otherwise

Carlos earned a reputation as one of his generation's most successful CEOs, but now the way he managed his own rewards may prove to be his downfall

Shortly after Carlos Ghosn took over in 1999 as chief operating officer of an ailing Nissan Motor, he overhauled the way the company paid senior employees.

Abandoning Japanese traditions that rewarded seniority and shunned incentive awards, Mr. Ghosn enforced a performance-based system and gave bonuses to midlevel managers.

The move rankled traditionalists but reflected Mr. Ghosn’s outspoken belief in merit- and market-based recognition. “The highest achievers got the highest rewards,” according to a case study of Mr. Ghosn’s early years at Nissan, which is based in Yokohama.

He earned a reputation as one of his generation’s most successful C.E.O.s, but now the way