According to Reuters, Toyota Chairman Akio Toyoda and nine other board members were successfully re-elected at Toyota’s annual general meeting on June 18, despite the opposition proposed by two main acting advisors, indicating that shareholders have put aside their concerns about corporate governance and certification testing scandals.
Toyoda Akio.
Photo: Toyota Motor.
However, it is expected that Toyoda will be re-elected.
This may be attributed to several key factors.
First of all, other subsidiaries of the Toyota Group hold a large number of Toyota shares, and their support provides an important backing for Mr.
Toyoda.
Second, Toyota achieved significant growth in revenue and net profit in 2023, and its stock performance was strong, indicating that Toyota maintained a strong momentum under the leadership of Akio Toyoda.
In addition, Akio Toyoda, the grandson of Toyota’s founder, remains popular with Japanese retail investors, who make up 12.
6% of the company’s shareholders.
In 2023, Akio Toyoda was re-elected with nearly 85% of the vote, but lower than the 96% in 2022.
Since then, Toyota, one of the world’s largest carmakers, has been plagued by a series of scandals by its subsidiaries, including its small carmaker Dafa Motors, and itself.
If shareholder support for Mr.
Toyoda falls further this year-a figure to be released on June 19-it could prompt Toyota to press ahead with governance reforms.
Analysts pointed out that speeding up the elimination of cross-shareholdings may become one of the feasible reform measures.
ISS (shareholder Services, an agency consultancy) questioned the way Toyota handled the problem.
New York City’s public employee pension fund agreed with ISS’s position and voted against Akio Toyoda’s re-election.
“it is important to set the tone for the top management,” Michael Garland, who is in charge of corporate governance for these funds, wrote in an emailed statement.
For the second year in a row, Glass Lewis advised shareholders to oppose Mr.
Toyoda’s re-election, arguing that Mr.
Toyoda was responsible for the lack of independence of the board and expressing concerns about Toyota’s strategic shareholding and return on equity.
Most of the opposition to Mr.
Toyoda is expected to come from overseas investors, who account for 1/4 of Toyota’s shareholder structure.
“I bought Toyota stock with my pension,” Hidenori Takahashi, 84, told Reuters ahead of Toyota’s annual shareholder meeting.
” Toyota is still considered “the best company in Japan” in the eyes of shareholders, he added.
However, he said the recent safety certification problems faced by Toyota were undoubtedly a “bad thing”, but Toyota seemed to be actively taking steps to prevent such misconduct from happening again.
Since the recommendation of the acting consultant, although Toyota has taken some measures to deal with the incident, the exposure of more certification violations is still a concern.
In early June, Toyota admitted that it had mistakenly conducted six different vehicle certification tests in the past, including three models still on sale.
Toyota said some of the tests were conducted under more stringent conditions than those set by the government, so the results were invalid.
Toyota’s share price has fallen 10% since certification violations were exposed.
However, Toyota’s share price is still up 18% so far this year.
Koji Sato, who took over as chief executive last year, reiterated his apology for the certification issue.
But neither Mr.
Sato nor Mr.
Toyoda responded directly to the acting adviser’s advice.
On June 18, shareholders also rejected an investor proposal urging Toyota to disclose more of its climate lobbying activities.
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