TOKYO — Carlos Ghosn was afraid of being fired as CEO of Renault if the world knew how a lot wage he was actually making, in response to testimony within the Japanese trial towards one in every of his former deputies, American human sources govt Greg Kelly.

A key witness this month turned up the warmth on Kelly, who stands accused of trying to hide Ghosn’s compensation bundle from monetary paperwork.

A small military of high executives have been preoccupied with discovering methods to pay Ghosn more cash in secret, in response to Hari Nada, a present Nissan authorized govt who agreed to testify within the case in alternate for immunity from being prosecuted.

Based on Nada, some executives referred to the issue of Ghosn’s deferred, unreported earnings as his “haircut.”

Prosecutors allege that Ghosn and Kelly conspired to cover greater than $80 million in deferred cost — cash that may in some way must be paid to Ghosn after his retirement.

Nada, who ran authorized affairs and the CEO workplace at Nissan and helped plan Ghosn’s allegedly postponed payout, this month claimed that Kelly was answerable for paying off the “haircut.”

Nada claimed that the American wished to retire however couldn’t achieve this till Ghosn’s funds have been found out.

Kelly, now 64, oversaw Nissan’s authorized affairs, human sources and its CEO workplace. In 2014, he handed off the authorized affairs and CEO workplace duties to Nada. Kelly then retired from operational duties at Nissan in 2015, however stayed on for yet one more 12 months in an govt place main human sources for the Renault-Nissan alliance.

After that, Kelly was wanting to retire for good however the Ghosn haircut was nonetheless not resolved, Nada asserted. The trusted American govt was saved on the Japanese carmaker’s board as a consultant director, with the facility to signal authorized paperwork, largely to handle Ghosn’s compensation, Nada mentioned.

Whereas pointing the finger at Kelly, Nada additionally painted an image of an govt who was merely able to exit. Nada mentioned Kelly’s continued function was largely about Ghosn’s compensation points.

“He mentioned merely, it was to get Ghosn paid — and as soon as he is paid, I can go fishing,” Nada recounted Kelly as explaining. “Mr. Kelly thought-about it his responsibility to get Mr. Ghosn’s haircut paid.”

Nada mentioned Ghosn needed the payout with out having to report it in Nissan’s monetary filings in order to not spark criticism in France, the place Ghosn was paid much less by Renault and the place the general public frowns on exorbitant govt pay. The French authorities, as Renault’s largest shareholder, saved a decent lid on remuneration there.

“He did not wish to be fired,” Nada mentioned of Ghosn. “If he paid himself what he needed, and that was disclosed, the French state would have felt obliged to fireside him.”

Nada mentioned Nissan executives have been dashing to rearrange Ghosn’s deferred cost bundle as a result of Ghosn was anticipated to retire from Nissan round 2015 or 2016. However Ghosn continued to steer each firms, and in addition ultimately Mitsubishi Motors Corp., till his November 2018 arrest in Tokyo.

Kelly and Ghosn have been arrested the identical day after touchdown in Japan on separate flights. Each deny the legal fees. However Ghosn, 66, fled Japan in December 2019 to hunt refuge in Beirut, past the attain of Japanese legislation. That left Kelly to face trial alone, dealing with years in Japanese jail if discovered responsible.

The trial started in September, however Nada’s testimony was the primary to zero in on Kelly’s alleged function as a key determine. Testimony by different witnesses portrayed Kelly as a tangential participant, one in every of many making an attempt to retain Ghosn’s expertise.

Nada testified he took orders from Kelly and labored carefully with Kelly to look at completely different cost concepts. One proposal included shopping for Ghosn’s picture and publishing rights, thereby compensating him for any future books or mental property initiatives.

However they settled on a primary three-legged framework that included rising Ghosn’s pension payout, paying him for a noncompete contract and agreeing to an advisory payment. All this, Nada alleged, was meant to compensate Ghosn for not taking the total quantity of earnings earlier.

Kelly’s protection, against this, maintains that Kelly was indirectly concerned with most of the remuneration discussions. Furthermore, those Kelly pursued have been framed as incentives to compensate Ghosn for future companies to the corporate, post-retirement, not work already rendered. The objective, the protection says, was to retain Ghosn’s expertise after he retired so he would not defect to a competitor.

One other authorized wild card is whether or not Ghosn’s pay bundle was truly finalized.

Kelly’s protection rests partly on the argument that the payouts have been by no means determined. Thus, his attorneys contend, any agreements weren’t legally enforceable and there was no obligation to reveal them.

Kelly’s attorneys will get an opportunity to cross-examine Nada as early as this week.

Earlier than Nada’s testimony, the courtroom additionally heard this month from Toshiyuki Shiga, a former COO and vice chairman underneath Ghosn, and Itaru Koeda, Nissan’s co-chairman from 2003 to 2008.

Each mentioned they have been additionally concerned in serving to plan Ghosn’s alleged payouts.

“To summarize, there was a failure of company governance at Nissan,” Shiga mentioned. “Carlos Ghosn step by step modified, and he would not take heed to different individuals. He grew to become nearly like a dictator. However those that allowed that to occur share within the duty.”

Each Shiga and Koeda asserted that they thought the artistic accounting was unlawful, at the same time as they labored on it. However they mentioned they have been powerless to oppose the strikes to Ghosn.

“He had absolute energy over all points, particularly govt remuneration,” Koeda mentioned.

Ghosn has mentioned previously that the legal fees towards him have been concocted by a cabal of Nissan hard-liners and Japanese authorities officers who needed to dam his plan to merge Renault and Nissan underneath a holding firm. Nissan management was persistently towards such a merger.