In a statement, the automaker confirmed that it was conducting an internal investigation based on reports from a whistleblower, and that the investigation affects both Ghosn and Greg Kelly, Nissan's representative director.
Nissan said in a statement that it had been investigating Ghosn and another board member for months, and was now cooperating with Japanese prosecutors.
Ghosn was reportedly arrested by Japanese authorities Monday.
"By under-reporting his corporate salary, he basically deprived Nissan's shareholders of opportunities to judge if the amount of his salary was appropriate", Toru Ibayashi, executive director of Wealth Management at UBS Securities Japan, said of Nissan's allegations.
It was a stunning development that left employees "bewildered" and fellow executives shocked and will pose a daunting test for the Nissan-Renault-Mitsubishi alliance, one of the world's biggest automakers.
That's right... Carlos Ghosn is under investigation by both Nissan and Tokyo prosecutors for what they have called "significant acts of misconduct". The Nissan-Renault-Mitsubishi trilateral partnership was led by Nissan, but the number of executive officers Ghosn invited from outside Japan has increased year after year.
The Japanese vehicle giant has since uncovered misconduct going back several years, the statement said.
Shortly after the release of the reports, Nissan announced it was seeking the removal of Mr Ghosn over claims of "serious misconduct".
Also, while Ghosn may have been the face of Nissan, his departure's impact on business overall could be limited, as in recent years he did not appear to have been heavily involved in daily operations.
North Korea tests mysterious new ‘high-tech’ tactical weapon
South Korea's defence ministry said it was preparing a statement on the North Korean test, but did not have an immediate comment. Washington insists the measures should stay in place until the North's "final, fully verified" denuclearisation.
Mr Saikawa said he would propose at a board meeting on Thursday to remove Mr Ghosn. He said in September that he will continue to pare back his roles at the three individual companies, while continuing to head their alliance.
Ghosn was seen inside Nissan as someone who keeps receiving high remuneration without confronting his own responsibility even when the company underperforms, while telling his subordinates to strictly achieve targets.
Renault shares tumbled more than 10 percent in Paris, while Nissan's German-listed securities fell nearly 10 percent.
The vote was overruled by Renault's board, but Ghosn later accepted a pay cut after Emmanuel Macron, France's finance minister at the time, threatened to step in with a new compensation law.
Together, Renault, Nissan and Mitsubishi employ more than 470,000 people in almost 200 countries, according to the alliance's website.
Ghosn, 64, is described by the Guardian as "one of the world's most powerful auto bosses" who "has managed the seemingly impossible job of running one carmaker in Japan, and another in France".
Arrest has "destabilized" the outlook for the Renault-Nissan-Mitsubishi Alliance.
"Compensation is more scrutinised today than in the past", Ghosn told The Financial Times in June, but added: "You won't have any CEO say, "I'm overly compensated".
He served as Nissan's chief executive from 2001 until April 2017, becoming chief executive of Renault in 2005, leading the two major automakers simultaneously. Mr Ghosn remained in that post until previous year.