[TOYOTA CITY, Japan] Toyota Motor shareholders re-elected Akio Toyoda as chairman on Thursday (Jun 12), highlighting support among mom-and-pop investors even as the Japanese automaker’s US$33 billion buyout of a group company draws criticism from overseas shareholders.
Toyoda, formerly chief executive of the world’s top-selling automaker and grandson of its founder, was widely expected to be re-elected at Thursday’s annual general meeting. For the first year in three, he was not opposed by either of the leading proxy advisory firms which had previously flagged governance concerns.
The breakdown of voting is yet to be released so it is unclear whether he secured more than last year’s 72 per cent, the lowest on record for a Toyota director. The Nikkei newspaper reported, without citing its source, that Toyoda was estimated to have received at least 96 per cent.
On Tuesday, shareholders of group company Toyota Industries peppered executives with questions about the carmaker’s US$33 billion buyout bid that foreign investors have called unfair for minority shareholders. Toyoda, who is not on Toyota Industries’ board, was not present at that meeting.
“There had already been a lot in the press about Toyota Industries … so I think many shareholders thought they had enough information,” said Akihiro Horiuchi, a Toyota Motor shareholder in his forties who was attending the AGM in central Japan for the second time. He said the automaker had explained its rationale for the deal on its Toyo Times news website.
“Toyota (Motor) is the best company in Japan and I think it will continue to grow,” Horiuchi said.
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Toyota Motor plans to take forklift-maker Toyota Industries private through a complex deal that will see Chairman Toyoda invest 1 billion yen (S$8.9 million) of his own money and spur restructuring of Japan’s most powerful corporate group.
Priced 16,300 yen a share, some overseas shareholders have said the price undervalues the target’s intrinsic value and strengthens the founding family’s control over the group.
Toyota Motor has said the acquisition will allow Toyota Industries to deepen collaboration with group companies, without the concern of short-term profit targets, as the group develops a broader mobility identity.
This year, proxy advisers Glass Lewis and Institutional Shareholder Services recommended shareholders re-elect Toyoda. Glass Lewis recommended voting against in the previous two years and ISS had last year.
Toyoda’s position came under scrutiny due to broader governance concerns. Neither adviser gave specific reasons for their change in recommendation this year.
The chairman has seen shareholder support slip in recent years. Last year’s 72 per cent was down from 85 per cent and 96 per cent in the prior two.
In a July interview with Toyo Times, Toyoda acknowledged his seat could be at risk if shareholder support continued to fall.
Toyota Industries, formerly Toyoda Automatic Loom Works, was founded in 1926 to make automatic looms. It set up an automotive division which it later spun off as Toyota Motor. REUTERS
