Nissan board gains shareholder backing, must tackle surveillance claims
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[June 27, 2023] By
Maki Shiraki and Daniel Leussink
TOKYO (Reuters) -Nissan shareholders re-elected its chief executive and
other board nominees on Tuesday at an annual meeting that came days
after revelations of a split among senior management and allegations of
corporate surveillance.
The Japanese automaker is investigating accusations that CEO Makoto
Uchida carried out surveillance of his deputy Ashwani Gupta, Reuters has
reported. The turmoil recalls the period that led up to and followed the
ouster of former head Carlos Ghosn, fanning concerns in-fighting could
distract management from a badly needed turnaround.
The shareholder meeting was the first since Nissan reached a new deal
with alliance partner Renault, negotiations about which deepened tension
between Uchida, who has pushed for the deal and Gupta, who had
reservations about some terms, sources have said.
The surveillance accusations were made in a letter to independent
directors by a senior Nissan adviser and will need to be addressed by
the new board. There were no questions by shareholders about the claims
at the shareholder meeting. Details about the letter were only published
on Saturday.
Christopher Richter, deputy head of research at brokerage CLSA, said the
discord at the top and the drawn-out talks about the Renault alliance
have distracted management from the primary business of making and
selling cars.
"It feels like they are stuck on neutral while a lot of their key
competitors are pushing the accelerator pedal to the metal," he said,
noting that rival Toyota was making big announcements about EVs and
solid-state batteries.
Nissan and Renault have yet to finalise the terms of the deal announced
in February under which Nissan would take a stake of up to 15% in the
electric vehicle unit Renault is spinning off, and Renault would reduce
its 43% stake in Nissan.
Gupta, who was chief operating officer (COO) and was seen as a likely
future CEO, did attend the shareholder meeting though Tuesday was his
last day at the company. News in May that he would not be nominated for
another board term had come as a shock to investors. His departure was
announced last week.
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CEO of Nissan Makoto Uchida and CEO of
Renault Luca de Meo attend a news conference to unveil new agreement
between Nissan and Renault in London, Britain February 6, 2023.
REUTERS/Toby Melville/File Photo
When a shareholder asked how Gupta viewed his time at Nissan, Uchida
answered by saying the executive had contributed greatly to projects
starting with the formulation of a mid-term plan. Gupta did not
reply to the question.
The company did not name a new COO to replace Gupta when it
announced its executive line-up on Tuesday. Other key positions
remain unchanged.
The meeting also highlighted shareholder frustration over Nissan's
share price, prompting an apology from Uchida that the price is
lower than in the past.
Nissan's shares have returned 1.4% including dividends in the last
year, versus 25% for the benchmark Nikkei 225.
The support from shareholders for the 10 board nominees, including
IBM veteran Brenda Harvey as an outside director, was widely
expected given the strength of support for management among Japan's
individual investors.
Shareholders on Tuesday also rejected a proposal by an individual
investor for higher dividends this financial year that was opposed
by the board.
The meeting was restricted to shareholders. Reuters monitored a
webcast provided for investors who did not attend in person.
(Reporting by Maki Shiraki and Daniel Leussink; Editing by Chang-Ran
Kim, David Dolan and Edwina Gibbs)
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