(June 23): Renault SA, which rescued Nissan Motor Co from near-bankruptcy a generation ago and sent in Carlos Ghosn to run the Japanese carmaker, is reasserting its influence as top shareholder after taking a back seat following the former chairman’s 2018 ouster.
The French carmaker, which holds 15% of voting rights, abstained from voting for Motoo Nagai, and he failed to garner enough shareholder support for reappointment at Nissan’s annual meeting Tuesday. Nagai, a former banker from the company’s main creditor Mizuho Financial Group Inc, played a pivotal role during Ghosn’s ouster and held sway over subsequent executive appointments as the only director serving on the nomination, compensation and audit committees.
Nagai’s exit and Renault’s renewed assertiveness under chief executive Francois Provost could mark a new phase for Nissan, which has been struggling to regain lost ground since Ghosn’s arrest on charges of underreporting compensation. Merger talks with Honda Motor Co in early 2025 were unsuccessful and despite a series of turnaround plans, the stock has lost more than two-thirds of its value since 2018.
While it remains to be seen whether Nissan will be nudged toward a merger deal or another alliance structure, it’s becoming clearer that the company may find it difficult to survive on its own.
“Renault must be getting increasingly concerned over Nissan’s future as it's usually quite careful when it comes to intervening in Nissan’s affairs,” said Julie Boote, an analyst at London-based research firm Pelham Smithers Associates Ltd. “If the emergency alarm is ringing, however, Renault must believe it needs to act now.”
Junichi Shinbo, also a former Mizuho banker, was among those approved as a director by shareholders at the meeting, although Renault had also withheld voting for him. In a statement, the French carmaker said it chose to abstain instead of opposing the nominees as a “deliberate decision which reflects Renault Group’s restraint, not opposition".
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“We could not support their appointments as they are linked to Mizuho, the main creditor of Nissan, and hence cannot be considered independent,” Renault said. “In addition, Nagai-san has served Nissan as statutory auditor, board and committee member for 12 years.”
Renault owns roughly 36% of Nissan’s stock but exercises fewer voting rights following a renegotiated alliance agreement between the companies in 2023. Their partnership had been designed to pool resources on development costs and negotiate better deals for parts and raw materials, and was eventually expanded to include Mitsubishi Motors Corp.
Before his ouster, Ghosn had sought to expand the alliance, which met institutional resistance in Japan among those who saw it as an irreversible merger and loss of Nissan’s independence. That played into the events that led to the charges against Ghosn, which he has denied. The former chairman now resides in Lebanon after fleeing trial in Japan in late 2019.
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Renault, facing its own struggles, took a range of steps to overhaul its business that included seeking new partnerships after it could no longer rely on Nissan to bolster its finances. The Japanese company suspended dividend payouts in mid-2024.
The French carmaker’s concerns over Nagai also focused on whether he could be considered an independent outside director, given his long association with Nissan since 2014, when he joined as statutory auditor and later became a board member in 2019.
Nissan CEO Ivan Espinosa, who announced the results at the annual meeting, confirmed that 11 other directors had reached the majority needed to be appointed or reappointed, including two directors — Valerie Landon and Timothy Ryan — nominated by Renault. The board will function with those members and no new director will be nominated in lieu of Nagai.
Nagai’s removal from the board reflects shareholder concerns over his involvement in the decisions that led Nissan into its current predicament, according to Bloomberg Intelligence senior auto analyst Tatsuo Yoshida. The vote against him “can be interpreted as a symbolic rejection of the previous regime rather than a judgment on any single individual", Yoshida said.
Several disgruntled stockholders voiced their disapproval at this year’s meeting, taking jabs at Nissan’s executives, pointing to the dismal performance of its share price and a lack of compelling models. One investor openly questioned Nagai's and Shinbo’s independence and opposed the reappointment of Espinosa in a motion that was ultimately denied on legal grounds.
“The biggest issue for shareholders attending this meeting is the stock price,” said the shareholder, whose remarks were met with loud applause. “That’s why most shareholders here are extremely unhappy.”
Nissan has been struggling to regain its footing, having posted net losses for the past two fiscal years, although it is forecasting a return to profit for the current period through March 2027. Sales declined 4.9% to ¥12 trillion in the latest year as the carmaker seeks to refresh its ageing lineup. The carmaker has ¥4.4 trillion in debt and rating agencies have cut its creditworthiness status to junk.
As management turmoil engulfed Nissan in the years following Ghosn’s ouster, Nagai emerged as a powerful broker of executive appointments. He was a key player in the departure of former COO Ashwani Gupta and was closely involved in the selection of Espinosa, people familiar with the matter have said.
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