Investors in Toyota backed management at the world’s largest automaker by sales and rejected shareholder questions about its climate policy after it faced unprecedented pressure to improve governance.
The outcome of the annual meeting, while widely expected, briefly boosted Toyota shares 8 percent on Wednesday, up 5 percent in the previous session after the company unveiled its ambition to commercialize its solid-state battery technology in electric vehicles by 2027. Build on further gains at the earliest.
Governance experts and environmental activists say the extraordinary challenges facing Japan’s largest company by market capitalization mark a major shift in the Japanese market as shareholders seek higher standards of governance and transparency.
Ahead of the annual shareholder meeting, U.S. proxy adviser Glass Lewis advised shareholders to vote against the reappointment of Toyota chairman Akio Toyoda, the grandson of the company founder and widely seen as the future of Japan’s powerful Keidanren business lobby group. person in charge.
Glass Lewis argued that the board chaired by Akio Toyoda did not have enough independent directors. Akio Toyoda stepped down as the group’s president last month but remains chairman of the board.
In response, Toyota said it was taking steps to increase diversity and reduce the number of internal directors.
Another proxy adviser, ISS, also advised investors to back a shareholder proposal by $20 billion Danish fund Akademiker Pension and two other European asset managers that would require greater disclosure of the automaker’s climate lobbying efforts.
Based on those recommendations, two of the largest public pension systems in the U.S. — California Public Employees Retirement System and New York City Comptroller’s Office — voted against Toyoda’s re-election. Along with the Church of England Pensions Board, the US Pension Plan also supports shareholder proposals on corporate climate policy.
“The very existence of such a proposal is very important. It shows that dialogue alone is clearly not enough.
Shareholders voted in favor of Akio Toyoda and nine other board members, but the results of the vote have not yet been announced.
Despite the advice of proxy advisers, the risk of Toyoda being ousted is not significant because the company has large cross-shareholdings and strong support from retail investors.
Still, given Toyoda’s approval rating of 96% last year, analysts say any notable drop in that number would indicate investor dissatisfaction with the company’s strategy.
On the manufacturing front, the automaker has been criticized in recent years for not being aggressive enough in rolling out electric vehicles and for appearing to be overly protective of its hybrid technology.
Responding to shareholder questions about Toyota’s marginal share of global electric vehicle sales, executives on Wednesday reiterated their stance that a multi-track approach is needed, according to participants.