Scandal-tainted Mitsubishi chiefs in line for enormous pay rise

Shareholders of the troubled Japanese car maker, dogged by months of negative press over its long-running mileage cheating programme, will vote on proposal.

Mitsubishi vehicles reflected on a mirror at Mitsubishi Motors' headquarters in Tokyo, Japan. Executives may see their salaries soar despite revelations of a data falsification scandal that emerged this year. Franck Robichon / EPA

Mitsubishi Motors has proposed tripling the total compensation its board of directors could earn per year, as the troubled Japanese car maker seeks to rebound from a fuel economy scandal that culminated in a rescue by Nissan.

Shareholders will vote on boosting the limit for total director pay to ¥2 billion (Dh65.3m) per year, from ¥960 million, and on introducing as much as ¥1bn per year in new equity-linked compensation, at an extraordinary meeting scheduled for December 14. Mitsubishi Motors said the amended compensation plan would enhance management and help to attract talented directors from outside the company and Japan.

Mitsubishi Motors sold a 34 per cent stake to Nissan last month for about US$2.3bn, after a months-long scandal related to manipulated mileage ratings and falsified test data. A company-appointed team of investigators in August said a “collective failure” by Mitsubishi Motors started with management and led to improper fuel economy testing dating as far back as 1991.

Shareholders also will vote next month on approving the appointment of the Nissan chairman Carlos Ghosn to the same title at Mitsubishi Motors, and on adding three other Nissan-appointed executives to the board.

Shares of Mitsubishi Motors have slumped 48 per cent this year in Tokyo, reducing the company’s market capitalisation to about $7.07bn. Nissan has declined 16 per cent, while the benchmark Topix index has dropped 4.9 per cent.

* Reuters

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