Fall in profit costs Nissan their bonuses

The board of motor giant Nissan will not receive bonuses after failing to meet performance targets, the carmaker confirmed last night.

The board of motor giant Nissan will not receive bonuses after failing to meet performance targets, the carmaker confirmed last night.

The Japanese manufacturer, which employs 4,300 people at its Sunderland plant, reported its first drop in profits in eight years due to slower sales in the US and Japan.

This is in contrast to both Toyota and Honda, which reported record sales in the year just ended.

A Nissan statement said: "Nissan can confirm that it will not table a proposal to issue bonuses to its board of directors for fiscal year 2006 at the company's next annual general shareholders' meeting.

"The decision not to issue bonuses to its board members acknowledges that the company's FY2006 financial performance has not been up to expectations."

The board's bonuses at Japan's third biggest car manufacturer - 44% owned by Renault - totalled £1.6m last year, a relatively small amount compared with its global rivals.

The move to scrap them highlights Nissan's under performance relative to its Japanese rivals, raising questions about its strategy under chief executive Carlos Ghosn.

Mr Ghosn, who was heckled at the AGM in Yokohama on Wednesday, said Nissan was in line to meet its forecasts for the year.

Performance in the first quarter was expected to be disappointing due to a lower margin and product mix and the absence of favourable tax rates it enjoyed in the first quarter of last year.

Mr Ghosn said: "In 2006, we did not meet our fiscal year performance objectives and we are taking that responsibility seriously."

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