No mention of buyout as Toyota shareholders reappoint Chairman Akio Toyoda
Toyota Motor's chairman kept his seat on the carmaker's board at its annual meeting, where talk of selfies and sumo wrestlers overshadowed Akio Toyoda's role in a contentious buyout of a group company.
Shareholders passed a motion Thursday to appoint or reappoint six people, including Toyoda and CEO Koji Sato, to Toyota's board of directors.
Although major proxy advisers backed Toyoda's reelection — reversing their stance after voting against him in 2024 — investors got a chance to air their grievances as Toyoda faced them publicly for the first time since the Toyota group launched a ¥4.7 trillion ($32.4 billion) bid to privatize Toyota Industries.
Yet not a single mention was made of the takeover, let alone the impacts U.S. trade policy might have on the world's biggest automaker.
Partway through the meeting, Toyoda reminisced about his longstanding personal friendship with a recently retired sumo wrestler. Later, one shareholder asked if he could trouble Toyoda for a picture together, which garnered broad laughter from other attendants.
Questions about the privatization of Toyota Industries and Toyoda's role in it never came up.
That was in stark contrast to earlier this week at Toyota Industries' annual meeting.
The company that spawned Toyota Motor had what could be its final gathering as a public company on Tuesday. Executives spent most of the time fielding questions from individual shareholders who sought an explanation for why the buyout was conducted so abruptly, and why the tender offer fell short of the company's market value.
The privatization of Toyota Industries aligns with the Japanese government's push to resolve parent-child structures, and chimes with its wish for big companies to unwind cross-held shares. But on the flipside, and what's angering many activist and retail investors alike, is that it could also hand Akio Toyoda greater influence over the group at what some say is an artificially low price.
Toyota Fudosan, an unlisted real estate developer that counts 15 other companies within the Toyota group as its shareholders, will own most of Toyota Industries via a holding entity once the deal is completed.
The tender offer, at ¥16,300 per share, includes funding from Toyota Motor as well as ¥2.8 trillion in loans from the country's top banks — Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group. Toyoda, who is also Toyota Fudosan's chairman, will personally invest ¥1 billion.
Shares in Toyota Industries are trading around the ¥16,340 mark but were as high as ¥18,400 earlier this month.
Toyoda has pushed back against criticism that the offer hands over too much for too little. The plan isn't to tighten his family's grip on the business group, he said in an interview published Friday on Toyota's internal media website, but rather to restore the company's identity and protect its future.
Independent of the Toyota Industries buyout, a growing number of Toyota Motor shareholders have over the years started to oppose Toyoda's inclusion on the carmaker's board. His share of affirmative votes fell from 96% in 2022 to 85% in 2023 and a record low 72% last year. This year's tally will likely be available in a few days once votes are counted.
Shareholders' concerns center primarily around corporate governance, including accountability for safety scandals. Toyota and its group companies, including Daihatsu Motor and Toyota Industries, have faced multiple certification testing violations that have raised questions about the company's internal controls and oversight.
Toyota's handling of the scandals led a pair of firms that advise large investors — Glass Lewis & Co. and Institutional Shareholder Services — to vote against Toyoda's reelection in 2024. This year, however, both have backed his reappointment.
'There are no particular concerns about the nominee,' ISS said in May.
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