YOKOHAMA (Reuters) – Nissan Motor Co (7201.T) CEO Hiroto Saikawa will resign on Sept. 16, the automaker said on Monday, bowing to pressure after he admitted to being improperly overpaid and marking further upheaval at a company battered by scandal and plunging profit.

Saikawa, who admitted to the overpayment last week, will be temporarily replaced by Chief Operating Officer Yasuhiro Yamauchi, with a permanent replacement expected by the end of October, the Japanese company said.

His resignation marks a dramatic early exit for a man who had been tasked with righting the automaker following the arrest and ouster of former chairman Carlos Ghosn late last year on charges of financial misconduct, which Ghosn denies.

But Saikawa’s brief tenure has been characterized by strain with top shareholder Renault and tumbling profits. Nissan’s shares have lost almost a quarter of their value this year.

The worsening relationship with Renault (RENA.PA) has been a particular concern for investors and has cast doubt on the future of the Franco-Japanese automaking alliance at a time of sweeping change and uncertainty in the global auto industry.

“Saikawa recently has indicated his inclination to resign, and in line with his desire to pass the baton to a new generation of leaders at Nissan, he will resign on Sept. 16,” Nissan’s chairman of the board, Yasushi Kimura, told a news conference.

Among the candidates to be the next CEO are non-Japanese, women, and those hailing from Renault, the chairman of Nissan’s nomination committee, Masakazu Toyoda, told reporters.

While contrite, Saikawa also took aim at his former mentor Ghosn. The 65-year-old has repeatedly said Ghosn’s emphasis on increasing market share at all costs undermined profitability.

“I had hoped to solve all of these issues before stepping down,” he said, referring to the automaker’s problems. “But I haven’t been able to, and for that I apologize.”

Nissan CEO Hiroto Saikawa speaks to media before the company’s board members meeting in front of his residence in Tokyo, Japan September 9, 2019, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

INTERNAL INVESTIGATION

Saikawa also said he would return the improper compensation, which although not illegal, was deemed to be in violation of internal company rules.

His admission of overpayment, following an internal investigation, has pitched Nissan into fresh crisis and appears to have accelerated the push for a replacement.

The nomination committee, established in June to find a successor, is made up of six company outsiders, including Renault Chairman Jean-Dominique Senard. It has drawn up a list containing more than 10 possible candidates.

The board said it was now speeding up its search.

Those on the list include Jun Seki, tasked with Nissan’s performance recovery; Yamauchi, the COO; and Makoto Uchida, chairman of Nissan’s management committee in China, an alliance source has told Reuters, speaking on condition of anonymity.

FUTURE WITH RENAULT

A key question will be how Saikawa’s successor approaches the alliance with Renault.

Seki has been seen as a frontrunner to become CEO. Prior to his latest promotion in June, the 58-year-old oversaw Nissan’s expansion in China, now the automaker’s top market. He joined the company in 1986.

Nissan CEO Hiroto Saikawa speaks to media before the company’s board members meeting in front of his residence in Tokyo, Japan September 9, 2019, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

Yamauchi is widely seen as a bridge between the alliance partners, and is known to be well regarded at Renault.

A near four-decade Nissan veteran, he rose up the ranks to become head of global purchasing in 2009. In that role he was credited with efforts to bring the two automakers closer together for joint purchasing of more vehicle parts and materials, leveraging combined scale to lower costs.

Additional reporting by Chang-Ran Kim and Maki Shiraki in Tokyo; Laurence Frost in Paris; Writing by David Dolan; Editing by Stephen Coates, Muralikumar Anantharaman and Mark Potter

Our Standards:The Thomson Reuters Trust Principles.


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