Did Carlos Ghosn have ideas worth $50 million?

TOKYO — How much was uber-executive Carlos Ghosn worth to Nissan Motor Co.?

Was it $80 million. Maybe $90 million? Possibly more than $100 million? And was just one of his ideas worth a cool $50 million?

Those are apparently some of the numbers thrown around as his lieutenants finagled his compensation package, right up until the day of Ghosn's November 2018 arrest.

They are eye-watering sums, by any measure. Perhaps even more so, considering Nissan weighed paying it to Ghosn after he retired, supposedly for work done in his golden years.

The question of Ghosn's worth is central to the charges against Nissan's now-deposed chairman and to the ongoing trial of his co-defendant, the automaker's former American director Greg Kelly. Kelly's defense rests partly on the idea that it was in Nissan's best interests to pay Ghosn big bucks even in retirement.

For judges in the Tokyo District Court, where Kelly's trial is entering its final stage, the question is whether the supersized compensation was truly meant to retain Ghosn after retirement or was instead just a pretense to compensate Ghosn for the pay cut he took in his last eight years at the helm.

If the payout was truly agreed to after retirement and paid in retirement for work done in retirement, then there would be no obligation to disclose it — and the criminal charges would be moot.

Prosecutors allege Ghosn, 67, and Kelly, 64, hid some $85 million in postponed compensation from 2010 to 2018. Both men, arrested the same day in 2018, deny any wrongdoing.

Kelly readily admits Ghosn took a massive pay cut — to the tune of about half his salary — in 2010 when Japan's financial disclosure rules changed. According to Kelly, Ghosn feared that if the true scale of his Nissan paycheck were known, he would face withering backlash in France.

But prosecutors allege Nissan made a deal to pay back that salary shortfall — the amount Ghosn would have earned had he not taken the pay cut — thereby illegally skirting disclosure rules. Kelly counters there was nothing to disclose, partly because no retirement deal was ever finalized.

Kelly said Ghosn was vastly underpaid in an industry where CEOs at competitors such as General Motors or Ford were pulling down packages that exceeded $20 million a year.

After his pay cut, Ghosn's disclosed compensation was about half that.

Frustrated with his pay, Ghosn contemplated retiring from Nissan as early as 2014 and quickly became a retention risk, Kelly said.

"If he retired at 60, he was still a young man, and he could have a full-time role as the top executive at any auto company anywhere in the world," Kelly testified.

Worse still, if Ghosn left for a rival, "he could get 10 to 20 executives to go with him."

So Kelly said he worked with Hiroto Saikawa, the longtime Ghosn lieutenant who was CEO of Nissan at the time of Ghosn's arrest, on retirement agreements in an attempt to keep Ghosn on board. Eventually, three agreements were penned in 2011, 2013 and 2015 to tweak the terms of Ghosn's fees and his obligations to the company.

The 2011 accord, which included a 10-year engagement as an executive adviser and a 20-year noncompete clause, was valued between $90 million and $100 million, Kelly reckoned. It included a lump sum, an annual salary and title to company-procured properties in Rio de Janeiro, Paris and Lebanon. It also gave Ghosn use of a company plane, driver and support staff.

"Many of Nissan's best ideas had come from Mr. Ghosn," Kelly reasoned. "If he came up with two ideas worth $50 million, and I knew he would, he would pay for the contract."

Even in retirement, Ghosn could earn his keep by helping with government relations, recruiting and even brand-building. Plus, there was value simply in keeping him out of competitors' boardrooms.

The agreement was updated in 2013, with variations on the formula, in a deal also valued at $90 million to $100 million. But the accord was not deemed enforceable unless signed by all three parties — Ghosn, Kelly and Saikawa. Ghosn was advised not to sign until after he retired. Otherwise, the payment would have to be disclosed.

According to Kelly, however, Ghosn wasn't planning to sign the 2013 accord, anyway. The 20-year consulting tie-up was apparently too long. "He didn't like the agreement," Kelly said.

In 2015, the agreement was updated again, and the consultation obligation was dropped.

By early 2018, Kelly was still working with other executives on a retirement plan.

The key element in all their considerations, Kelly said, was a legal means to avoid disclosure. Even at that late stage, the same year as Ghosn and Kelly's arrest, Kelly said terms of Ghosn's noncompete and consultancy arrangements had not been finalized, nor had payment been accrued.

By 2018, focus shifted to deeply discounted stock options as a potential payment method. And in June that year, a fellow executive who had been keeping tabs showed Kelly a tally of the shortfall in Ghosn's salary since he took the pay cut in 2010. The total came to about $85 million — the number eventually flagged by prosecutors as the hidden compensation.

In court, Kelly's lawyers produced several charts summarizing retirement allowance plans and postponed remuneration from this period. They all showed the roughly $85 million as the remuneration, but with various totals for proposed packages, depending on how Ghosn's pension was calculated.

Some proposals totaled as high as $191.4 million.

Kelly told the court he had never seen any of those tabulations before his arrest.

In fact, Kelly testified he was still trying to calculate a package for Ghosn even on the charter jet that took him to Japan on Nov. 19, 2018, the day of his arrest. Kelly's lawyer showed notes jotted down by Kelly on a yellow legal pad during the flight. Kelly's notes show Nissan weighing a payout of more than $153 million, including extra for his housing.

With testimony heading into its final weeks, judges eventually will have to decide whether that amount was ever truly finalized and was indeed a legitimate package for substantial services in retirement or, as prosecutors allege, whether it was just window dressing to cover Ghosn's pay cut.

Naoto Okamura contributed to this report.