Renault plans to scrap a golden parachute of about Euro 11 million ($12.4 million) for jailed former chief Carlos Ghosn, avoiding a politically explosive payout at a time of Yellow Vest protests across France.
Ghosn won’t benefit from a non-compete agreement that would have paid him two years’ compensation, the automaker said Wednesday. Renault also plans to withhold stock-based pay awarded from 2015 to 2018 that was conditional on his staying at the company.
Until his November 19 arrest on allegations of financial misconduct, the jet-setting executive led an automotive empire that stretched around the globe. He ran not only Renault as chairman and chief executive officer, but also served as chairman at Nissan Motor and Mitsubishi Motors, its alliance partners. He quit Renault last month.
The non-compete pact would have been worth upwards of Euro 5 million, while 100,000 performance-related shares granted in 2015 that would have vested this week have a current market value of about 5.7 million euros. He would also have been entitled to millions of euros worth of additional shares in the future had he remained at the company.
Handing the imprisoned former executive a huge check would have been embarrassing for the French state, which holds 15 percent of Renault. President Emmanuel Macron has been under attack for months from protesters complaining that the government favors the rich and isn’t doing enough to improve the lives of ordinary people.
The board said it will decide next month on Ghosn’s remuneration for 2018.
Questions over his compensation at Nissan led to his fall from grace. After a months-long internal investigation that was kept from Renault, the Japanese company alleged that he had understated his income for several years. He was arrested in Tokyo and has been in custody ever since. Ghosn has denied wrongdoing.
Nissan took the unusual step on Tuesday of booking a 9.2 billion yen ($83 million) charge to reflect accumulated payments due to Ghosn for the eight years ending in 2017.
In Tokyo on Wednesday, Ghosn changed his legal team, hiring Junichiro Hironaka to help him with the “trial phase” of his case. The previous lawyers, including former local prosecutor Motonari Otsuru, failed to win bail for Ghosn as he awaits a trial that could be months away.
The executive is also under scrutiny at Renault, which flagged last week that Ghosn may have made improper use of a company sponsorship agreement with the Chateau de Versailles to help pay for his Marie Antoinette-themed wedding party. Ghosn has since offered to repay the funds.