TOKYO, Sept. 10 (Xinhua) -- The Japanese government on Tuesday said it supported the decision of Nissan Motor Co. CEO Hiroto Saikawa's decision to step down for accepting huge amounts in overcompensation from an executive remuneration scheme at the automaker.

Lights illuminate offices at the Nissan Motor Co. in Yokohama, Japan, on Monday, Sept. 9, 2019. (Photo: VCG)

The government said Saikawa stepping down was evidence of the Yokohama-based automaker's corporate governance reforms working effectively in the wake of the high-profile arrest of the company's former boss Carlos Ghosn for alleged financial misconduct.

"The resignation proves that corporate governance is working. We have also been involved in supporting Nissan's implementation of corporate governance measures," Economy Minister Hiroshige Seko told a press briefing on the matter.

Japan, once a bastion of the manufacturing industry, has found its image severely diminished amid a number of scandals in which the firms involved have been accused of lax corporate governance.

Seko said the arrest of Ghosn had led to a great deal of mistrust in corporate governance at Japanese firms as a whole and intimated that Nissan installing a new board with a majority of outside directors as part of its reforms was a step in the right direction.

Following Nissan's board convening Monday, chairman of the automaker's board Yasushi Kimura said that Saikawa will resign from his post on Sept. 16.

The announcement from Kimura followed the board gathering to discuss Saikawa and other executives at Nissan being overcompensated by a scheme connected to stock appreciation rights.

Earlier on Monday, Saikawa himself indicated that he planned to step down from his post after admitting he was hugely overpaid by the scheme used to incentivize executives at the embattled automaker.

The latest revelation of financial indiscretions at Nissan come as the Japanese automaker is already struggling to deal with slumping earnings and the fallout from Ghosn's arrest in November last year.

A probe by Nissan revealed that Saikawa, who became CEO in April 2017 and was once a member of Ghosn's inner circle, had received tens of millions of yen through stock appreciation rights that he was not entitled to.

The probe found that he was overpaid by around 47 million yen (438,000 U.S. dollars) through an equity-linked remuneration scheme in 2013.

Nissan said its Chief Operating Officer Yasuhiro Yamauchi will, for the time being, serve as acting CEO until the company names a successor to Saikawa prior to the end of October.

"I hope that Saikawa's successor will be chosen with the company's corporate governance functioning, mainly by the nomination committee, and not through an in-house power struggle as has been the case in the past," said Seko.