Latest news with #activistinvestors
Bloomberg
6 days ago
- Business
- Bloomberg
Corporate Japan's Shareholders Show More Clout This AGM Season
A record number of Japanese companies saw shareholder proposals pass at their annual general meetings this year in a sign that investors are exerting more influence in the market. While shareholders in general still support company management, the notable break from their passive stance is seen as a boon for funds looking to invest in Japan. Activist investors have been inundating companies with an unprecedented number of proposals at meetings, calling for action such as the disposal of real estate, changes in strategy and bigger stock buybacks.
The Australian
16-06-2025
- Business
- The Australian
Why CFOs need a capital allocation framework
Determining how to allocate capital is arguably one of the most complex responsibilities facing CFOs today. The process of generating and deploying capital is core to the CFO role and key to producing outsized return on capital — but also one that is quite difficult to perform well. Internal agendas, volatile market conditions, and human biases all cloud the decision-making process. With boards and institutional investors increasingly expecting management to provide clarity on how capital will be deployed to achieve strategic goals, having a robust capital allocation strategy that guides and explains investment decisions is vital. However, according to a global Deloitte survey of business leaders, only 22 per cent claim to be very confident in the ability of their capital allocation approach to execute the organisation's overall strategy and optimise return on capital. This disconnect between expectations and reality has consequences. The absence of well-structured capital allocation framework can lead to suffocation of value creation, suboptimal returns on shareholder capital, and, at the extreme, companies can expose themselves to activist investor pressure or opportunistic takeovers. I recall the case of an SaaS company whose management team could not decide whether the business should allocate additional capital to sales and marketing to chase growth, or double down on product development to improve long-term retention and pricing power. Without a framework to guide them, progress stalled, and ultimately, private equity (who are typically very skilled at capital allocation) acquired the business. The lesson is clear: failing to actively manage capital allocation doesn't mean the decision goes away. It might just be made by someone else. As keepers of the corporate purse, CFOs are the linchpin of any good capital allocation strategy and will ultimately have the most influence over its design. But how do they help ensure the development of a strategy that's fit-for-purpose? It all starts with asking the right questions, clearly and consistently, like: what is our strategy and where is capital needed to execute strategy? What is our strategic asset allocation across the business? For a diversified real estate group, this might mean sector exposure or geographic mix. For a miner, it might relate to commodity exposures. Visibility over where your capital is deployed and the alignment to strategy is a perquisite for intelligent decision-making. Next you could ask what your mandatory capital investments, across both operating and capital expenditure, are. Things like safety upgrades, regulatory compliance or maintenance capex are all essential spends that must be prioritised before discretionary investment. Doing this helps see how much capital there is to work with. Grouping capital needs into categories like maintenance, optimisation, transformation, and growth can also help teams evaluate options more clearly. Aleks Lupul is Lead Partner for Deloitte Capital Allocation, Modelling & Insights CFOs must also define what level of gearing is acceptable and understand how it impacts the cost of capital and appetite for risk. Determining the right level of gearing can be difficult, but scenario analysis is essential, particularly in times of uncertainty. You need to understand the potential impact of volatile trading environments on your business and ability to meet debt covenants, as well as implications on refinancing risk. Equally important are the company's commitments to shareholders and having a clear understanding of what shareholders expect from the business. Dividend policies, reinvestment promises, understanding shareholders' support and appetite to fund growth and share buyback schemes are all part of the capital equation. Sometimes the best use of capital may be to return it to those who have placed their trust in the business. Portfolio performance should also be reviewed regularly, and not just when considering new investments. It is important to remember that capital allocation is not just about the deployment of capital — staying invested in existing assets or businesses is a capital allocation decision too. CFOs should ask whether where their capital is invested continues to be consistent with strategy, maximises shareholder value and whether they are the best owner of the asset or business. By adopting a portfolio approach, companies can spread risk intelligently. For instance, when most of the portfolio is weighted toward stable, low-risk investments, a company can afford to place selective, higher-risk bets on innovation or market expansion. Alternatively, when volatility is high, organisations can dial back risk exposure without halting growth altogether. This type of strategic flexibility is only possible when capital is actively managed. These questions and considerations are not exhaustive but are central to developing a strong capital allocation framework and all the benefits that come with it. But in my view, the best capital allocators also embed a return on capital mindset into their organisations' culture, which guides daily decision-making at all levels of the organisation. The top-performing CFOs foster an organisational mindset where capital is treated as precious, where each dollar invested must be producing returns for the business aligned with long-term goals. This more mature approach also allows for a more integrated view of financial and non-financial objectives — like environmental, social and governance (ESG) concerns. For example, there is often tension between investing in sustainability and delivering immediate shareholder returns (although I would argue that delivering shareholder returns in the long-term cannot be done without ESG in mind). Good capital allocation frameworks don't solve that trade-off, but it does make it more visible. It allows for a conversation about how ESG forms part of capital allocation decisions and how capital allocation can promote ESG agendas which form part of an organisation's strategy. In many ways, company management has never been more scrutinised than it is today. CFOs who fail to take a rigorous approach to capital allocation risk falling short of market and governance expectations. Those who embrace it as a core leadership discipline can unlock tremendous value for the organisation and its shareholders. A well-structured capital allocation framework doesn't just help organisations decide where to invest. It helps companies align human capital with strategy to deploy scarce capital in the areas that achieve greatest return for shareholders and other stakeholders. In an era of constrained resources and heightened scrutiny, that kind of clarity is essential. Aleks Lupul is Lead Partner for Deloitte Capital Allocation, Modelling & Insights. - Disclaimer This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ('DTTL'), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. Please see to learn more. Copyright © 2025 Deloitte Development LLC. All rights reserved. -
Japan Times
10-06-2025
- Business
- Japan Times
Fuji Media keeps real estate spinoff in play as activists circle
Fuji Media Holdings' incoming president said "all options' regarding its real estate operations remain on the table, including a possible spinoff along the lines of activist investor demands. The Japanese entertainment group last month rejected a shareholder proposal from Dalton Investments calling for a different slate of directors as well as a spin-out of its lucrative real estate arm. But the company has yet to finalize its long-term strategy, Kenji Shimizu said in an interview Monday. "The resulting scenario may be something along the lines of what shareholders propose, or we may pursue further growth instead,' Shimizu said. "Both scenarios are possible.' The Japanese broadcaster — which is struggling to recover from a sexual harassment scandal — has been sparring with activist shareholders in an exchange that's become a gauge of corporate governance in Japan. Both Fuji Media's executives and Dalton are on a campaign to win shareholder support ahead of an annual general meeting on June 25. For the near term, however, Fuji Media is reluctant to spin out the real estate arm. Operating profit in that division has grown four to five times since 2012, Shimizu said. In contrast, Fuji Media's intellectual property assets — key to improving profitability in Fuji's core media and content segment — will require several years to monetize effectively, said Shimizu, who is now president of the group's television network. The real estate business essential as a source of investment income for the foreseeable future, he said. Fuji Media has been struggling with declining advertising revenue alongside public condemnation of its handling of sexual misconduct allegations involving former celebrity Masahiro Nakai. Dalton has argued that Fuji should focus solely on growing its core media and content businesses. Dalton's co-founder James Rosenwald has said that he and Fuji Media's largest shareholder, Aya Nomura, agree that spinning off the real estate unit could potentially double the conglomerate's corporate value. Demands to split out the real estate operations will likely persist beyond the shareholder meeting later this month, Shimizu said. "Until our corporate value rises, we will continue to face such criticism,' he said. Fuji Media is proposing 11 directors to a board that will keep Shimizu but replaces the rest of its current lineup. Dalton has proposed an alternative slate of 12 directors, including Yoshitaka Kitao, chairman and CEO of SBI Holdings. "This board is the best we can offer now,' Shimizu said, but added that discussions are possible should any of Dalton's candidates be elected. "The task on hand is to discuss ways to enhance corporate value.'
CBS News
27-05-2025
- Business
- CBS News
As their policies shift, see how much U.S. airlines are making in checked bag fees
What to know about Southwest Airlines new fare options Checked bags are a big business for U.S. airlines, bringing in more than $7 billion in revenue last year, according to data from the Bureau of Transportation Statistics. The fees have brought more revenue to the airlines than it ever had prior to the pandemic, the data shows. Airlines began shifting their checked bag policy in recent years to keep up with what they say are rising operational costs, including higher prices for fuel and increased wages. Most recently, Southwest Airlines announced it will start charging $35 for the first checked bag — after more than 50 years of only charging for a third bag. Changes at Southwest came amid mounting pressure from activist investors to improve its financial performance. The airline in September predicted that new fees would lead to $1.5 billion a year in revenue. Last year, JetBlue brought Uber-style surge pricing to bag-check fees, making it more costly to check luggage during peak travel periods. American Airlines also increased its fees in 2024 from $30 to $35 for the first checked bag. Breaking down the revenue from checked bags for U.S. airlines Checked bags brought in about $7.27 billion in revenue last year for Alaska Airlines, Allegiant Air, American, Breeze Airways, Delta Air Lines, Frontier Airlines, Hawaiian Airlines, JetBlue, Silver Airways, Southwest, Spirit Airlines, Sun Country and United Airlines, according to the government's data that was last updated on May 6. That is up from $7.07 billion in 2023, Bureau of Transportation Statistics' data shows. In 2022, U.S. airlines made over $6.7 billion in bag fees, another major jump from the $5.3 billion made in 2021. American, Delta and United — the three largest U.S. airlines — made over $1 billion each last year on checked bags — and their revenue from it has been climbing since the COVID-19 pandemic halted air travel in 2020. When the pandemic hit, total checked bag revenue plummeted to $2.84 billion in 2020, down from $5.76 billion in 2019. Kiki Intarasuwan Kiki Intarasuwan is a news editor for CBS News & Stations. contributed to this report.
Entrepreneur
20-05-2025
- Automotive
- Entrepreneur
Elon Musk Is Committing to Five More Years as Tesla CEO
Tesla's CEO said there is "no doubt" that he is staying at the electric vehicle maker. Elon Musk's new five-year plan has him staying at Tesla. In an interview at Bloomberg's Qatar Economic Forum on Tuesday, Tesla's CEO said that he is committed to staying at the electric vehicle maker for years to come. Related: A Tesla Executive Received a Record Pay Package, and It's Not Elon Musk When asked if he will still be leading the company in five years, he said: "Yes, no doubt about that at all." CNBC reports that Musk wants to keep his position as Tesla's CEO to maintain "sufficient voting control" over the company to avoid activist investors. "It's not a money thing," Musk said. "It's a reasonable control thing over the future of the company." Related: With Tesla Down 71% in Net Income, Elon Musk Says He'll Spend Less Time at DOGE Tesla's sales have dropped 13% in the first three months of this year, marking the largest quarterly drop in Tesla's history. Net profits have plunged by 71%. The EV maker's revenue also fell 9% year-over-year. Musk is currently the richest person in the world, with a net worth of $376 billion at press time, per the Bloomberg Billionaire Index.
