Kaname Capital Submits Shareholder Proposals for the June 2025 Annual General Meeting of Fukuda Denshi

Business Wire

08-05-2025

TOKYO--(BUSINESS WIRE)--Kaname Capital ('we' or 'our firm') announced today that on April 25, it submitted shareholder proposals to Fukuda Denshi Co., Ltd. ('Fukuda Denshi' or the 'Company') for inclusion in the 78th Annual General Meeting of Shareholders scheduled for June 2025. The proposals seek to amend the Company's Articles of Incorporation to establish a Nomination and Compensation Advisory Committee with formal authority and independence, and to mandate that this committee review employee compensation and succession planning.
We have been a shareholder of Fukuda Denshi since January 2019, holding shares for over six years. Over the past two years, we have submitted shareholder proposals advocating better governance and improved treatment of employees. However, given the Company's continued disregard for the voices of shareholders and employees alike, we believe it is both necessary and meaningful to submit proposals once again this year.
[Shareholder Proposal Document]
The proposal consists of the following four items:
Partial Amendment to the Articles of Incorporation (Establishment of a Nomination and Compensation Advisory Committee)
Partial Amendment to the Articles of Incorporation (Composition of the Nomination and Compensation Advisory Committee)
Partial Amendment to the Articles of Incorporation (Referral of Employee Compensation to the Committee)
Partial Amendment to the Articles of Incorporation (Referral of Succession Planning to the Committee)
While the full rationale is provided in the proposal document, our key points can be summarized as follows:
(1) Despite its strong profitability, Fukuda Denshi has failed to appropriately share its success with employees.
Although the Company has generated substantial profits, those gains have disproportionately benefited Chairman Fukuda and a small circle of executives close to him. Employee compensation has not kept pace. We are concerned that this growing compensation gap is eroding employee morale and undermining the Company's long-term competitiveness.
We therefore urge that an independent Nomination and Compensation Advisory Committee review this disparity and lead efforts to rectify the imbalance. Notably, when we submitted a proposal last year calling for improved employee treatment, the Board refused to present it to shareholders, citing its non-binding nature, a decision that appeared to be designed to avoid engagement with this important issue.
(2) Chairman Fukuda turns 80 this year, yet no credible succession plan has been disclosed.
In 2023, Chairman Fukuda sold a substantial portion of his Company shares through a ¥10 billion buyback and established the Kotaro Fukuda Sports Promotion Foundation, which has since received public interest certification (a public interest corporation benefits from inheritance tax privileges in Japan).
He is also believed to have set up a vintage car restoration and exhibition facility near Mt. Fuji through his private asset management companies and acquired over 17,000 square meters of land in Nasu, Tochigi Prefecture. These developments suggest that his focus is increasingly outside the Company.
We believe it is inappropriate for someone so disengaged to remain in the role of Representative Chairman. This leadership vacuum risks discouraging younger executives and accelerating talent attrition. A credible succession plan is urgently needed. We therefore call on the Nomination and Compensation Advisory Committee to take the lead in formulating a plan for leadership succession, one that inspires confidence and ensures continuity.
At Kaname Capital, we are committed to supporting portfolio companies that serve not only the interests of a select few but also create sustainable value for all stakeholders—including employees, customers, and shareholders.
In our view, Chairman Fukuda appears more focused on securing his own compensation than rewarding employee contributions and more interested in vintage cars than in serving patients and healthcare professionals. We believe Fukuda Denshi must reform its governance to fulfill its responsibilities as a listed company.