Latest news with #TaiyoHoldings
Reuters
10-07-2025
- Business
- Reuters
Management booted out as Japan's shareholders flex their muscles in AGMs
TOKYO, July 2 (Reuters) - Japan's annual general meetings in June saw a CEO voted out and an entire board of directors replaced in a sign shareholders are increasingly holding management to account and providing impetus to regulatory moves to boost corporate value and share prices. Authorities in Japan, which is emerging from years of deflation, have ramped up calls for more proactive and vocal shareholder stewardship over the last two years - and the AGMs suggest that activists and domestic institutional investors are making the same arguments to improve corporate performance. An increasingly assertive domestic shareholder base is likely to sway management changes, investors and advisors say, providing momentum to Tokyo Stock Exchange's quest to make the world's fourth-largest economy an attractive destination for international and domestic investment. Investors are already flocking in, with the TSE's reforms helping spark a rally in Japanese stocks, which last year scaled an all-time record high and have since been buoyant. Last month chemicals firm Taiyo Holdings' (4626.T), opens new tab chief executive officer Eiji Sato and the entire board of directors of electrical parts maker Tokyo Cosmos Electric (6772.T), opens new tab were forced to step down. "It's extremely rare in Japan that a boss or a board member loses his job merely because he's deeply disappointing," said Nicholas Smith, strategist at CLSA Securities. Whereas in the past management has typically only been forced out in cases of misconduct or fraud, the prospect of ouster for perceived poor business decisions is prompting executives and the boards of companies to change course to meet shareholder demands. "There's no aftermarket for dud managers. There's negligible mid-career hiring and these people are lifers at their companies so all of this is quietly terrifying," Smith said. Taiyo CEO Sato was punished for diversifying into pharmaceuticals, which had poorer margins than its core business, dismissing privatisation proposals from private equity funds and because he was deemed to be overpaid, Smith said. "This is one of the rare cases of a CEO being ousted for corporate governance reasons rather than legal ones," said Seth Fischer, chief investment officer at activist investor Oasis Management, which voted against Sato. Taiyo's largest shareholder DIC Corp (4631.T), opens new tab and founding family also voted against Sato, Tokyo Shoko Research showed. "Now management can be voted out for not making any changes and other companies are moving towards needing to do something," Fischer added. Managers have cause for concern as domestic investors adopt more stringent shareholder voting guidelines in line with the TSE's reform recommendations, which has made voting against directors more commonplace. For instance, Sumitomo Mitsui Trust Asset Management's votes against management proposals in the 12 months ended June 2024 stood at 22.1%, up from 19.8% the year prior. Increasingly this means domestic asset managers vote in the same way as activists. "There's more alignment between activists and domestic shareholders on capital policy which is leaving companies with nowhere to hide," said Govinda Finn, a governance researcher at Kobe University. "We have an incredibly good relationship with domestic investors and increasingly engage with them to share ideas about what we think the issues at companies are," Fischer said. The new prospect of domestic investors voting against management has prompted firms to take preventative action, said Hiroo Shimoda, senior manager at MUFJ Trust and Banking, which advises firms on shareholder relations. "More and more companies think it would be a real problem if their domestic shareholders and activists came to be in agreement, so they rework their strategies in advance," Shimoda said.
Japan Times
23-06-2025
- Business
- Japan Times
Japan activist clout shown in shareholder rejection of Taiyo CEO
Shareholders' rejection of another term for Eiji Sato as Taiyo Holdings chief executive officer over the weekend was a rare event highlighting the growing clout of activists in Japan's stock market. The Tokyo-based chemicals maker said Monday that as a result of the vote, Executive Vice President Hitoshi Saito replaced Sato as top executive. Voting out a company's CEO candidate, something that doesn't happen often in Japan, is another sign of how activists are pushing to change company policies that they claim are weighing down shareholder returns. In 2019, shareholders of Lixil turned down candidates proposed by the housing material maker in a similar vein, choosing instead former CEO Kinya Seto. Activist shareholders submitted a record number of proposals at annual general meetings this year that question management decisions and urge changes to board structures and privatizations. Taiyo shares rose as much as 2.5% on Monday, poised for a fourth-straight advance, even as the broad Topix share index dropped. The vote against Sato at the general shareholders meeting on Saturday might force the company to consider changing its management structure and strategy. Sato had said earlier this month that the company would decide on formal proposals for capital alliances, including privatization, from fewer than five private equity funds. The Taiyo case "shows how Japan is changing and shareholders are voting for better governance, capital efficiency and a business portfolio built around core strengths rather than ego,' wrote Nicholas Benes, CEO of the Board Director Training Institute of Japan. "I cannot remember a case where a sitting CEO was deposed in Japan for the clear reason that his favorite strategy didn't work well and he was too stubborn to give up.' A number of major shareholders, including DIC and activist fund Oasis Management, had opposed Sato's reappointment. DIC has a 19.3% stake and Oasis held an 14.9% share, according to a compiled data. DIC criticized Taiyo as being slow in setting up a committee to study an acquisition proposal and in pushing ahead for talks with the prospective buyer. Oasis criticized Sato's compensation as being too high. According to a Taiyo filing, Sato's total compensation for the fiscal year ended March 31 was ¥307 million ($2.1 million). Oasis said in a statement that it had called for shareholders to vote against the re-election of Sato, on the grounds that his leadership was detrimental to Taiyo's corporate governance and value. "We are pleased,' it said, that "the collective will of shareholders has validated our position.'
Bloomberg
23-06-2025
- Business
- Bloomberg
Japan Activist Clout Shown in Shareholder Rejection of Taiyo CEO
Shareholders' rejection of another term for Eiji Sato as Taiyo Holdings Co. chief executive officer over the weekend was a rare event highlighting the growing clout of activists in Japan's stock market. The Tokyo-based chemicals maker said Monday that as a result of the vote, Executive Vice President Hitoshi Saito replaced Sato as top executive.
Yahoo
21-06-2025
- Business
- Yahoo
Japan chemicals firm's CEO fights to keep job as investors revolt
Japan's governance reforms have emboldened shareholders, who are now increasingly vocal about their demands. In a sign of rising shareholders' activism, a president of a semiconductor material maker is at risk of getting voted out of office at the firm's annual general meeting Saturday. Eiji Sato is facing an uphill battle to be re-appointed as president and CEO of Taiyo Holdings, a position he has held since 2011, after some shareholders criticised his response to various acquisition proposals as being too slow. The US$2.5 billion ($3.2 billion) company's biggest shareholder, DIC, an ink maker that has long been a 'stable shareholder' with its 20.04% stake, has come out against Sato. DIC criticised Taiyo as being slow in setting up a committee to study an acquisition proposal and in pushing ahead for talks with the prospective buyer. Joining DIC in calls for Sato's ouster were the company's second and the third biggest shareholders — activist fund Oasis Management Co. and a holding company owned by Taiyo's founding family. The company's three biggest shareholders own about 37% of the shares outstanding. Japan's governance reforms have emboldened shareholders, who are now increasingly vocal about their demands. Although there has been a decline in support for board executives at company AGMs in recent years, it is still rare for a company's proposals to be outright rejected at an AGM. Other Taiyo shareholders such as California State Teachers' Retirement System also announced opposition to Sato after proxy adviser Glass Lewis recommended voting against him. Still, Sato has his supporters. Rival proxy adviser ISS says Taiyo's strong earnings growth over the last five years is a reflection of its solid market position in resist ink used for printed circuit boards and semiconductors. See Also: Click here to stay updated with the Latest Business & Investment News in Singapore Briefs: Record delisting rush as Japan firms flee TSE; London woos Chinese listings as City fights IPO drought Japan firms exit Tokyo Stock Exchange at record pace in delisting rush JX metals rises in debut after biggest Japan IPO since SoftBank Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click here
Bloomberg
20-06-2025
- Business
- Bloomberg
Japan Chemicals Firm CEO Fights to Keep Job as Investors Revolt
In a sign of rising shareholders' activism, a president of a semiconductor material maker is at risk of getting voted out of office at the firm's annual general meeting Saturday. Eiji Sato is facing an uphill battle to be re-appointed as president and CEO of Taiyo Holdings Co., a position he has held since 2011, after some shareholders criticized his response to various acquisition proposals as being too slow.
