An unusual incident occurred at a securities firm when a proposal to keep the company president in his position was withdrawn just before the general shareholders’ meeting. This year, with the growing presence of activist shareholders, the number of shareholder proposals has reached a record high.

Shareholders
“It was like a bolt from the blue.”

Toyo Securities is a mid-sized securities company. The proposal to reappoint President Kuwabara at the general shareholders’ meeting was suddenly withdrawn one hour before the meeting began. The background to this is a conflict with vocal shareholders who hold nearly 30% of the voting rights.

“We can no longer expect the current management team to enhance shareholder value.”

The company’s performance has been sluggish, with a final deficit in the fiscal year ending March 2023. Activist shareholders have been calling for his dismissal. Based on the voting results in advance, it appears that there was less than a majority in favor of the proposal, so the president himself offered to step down.

Shareholders
“If you’re not careful, it’s easier for someone to get in.”

At this year’s general shareholders’ meeting, 91 companies received shareholder proposals, the highest number ever.

Reporter
“The reason behind the growing presence of activist shareholders is the rapid unwinding of cross-shareholdings between companies.”

The number of stable shareholders has decreased due to the elimination of cross-shareholdings. This has also been supported by the Tokyo Stock Exchange’s request for all listed companies to improve their share prices, and an increasing number of shareholders are voting in favor of activist shareholder proposals if they believe they will increase corporate value.

The relationship between companies and shareholders is beginning to change.