Toyota Chairman Akio Toyoda Retains Position Despite Decreased Shareholder Support

In the face of scandals and governance issues, Toyota TM Chairman Akio Toyoda and nine other board members have been re-elected at the annual general meeting on Tuesday.

What Happened: Despite two leading proxy advisers recommending against Toyoda’s re-election, his reappointment was expected due to the automaker’s shareholdings by other Toyota group firms, record business results, and his popularity among Japanese retail investors, Reuters reported.

However, a significant decrease in shareholder support for Toyoda, the figures for which will be released on Wednesday, could prompt further governance reforms. Toyoda’s approval rating dropped to 85% last year from 96% in 2022.

Toyota has been dealing with a series of safety and certification testing violations at group firms, including small car maker Daihatsu and its parent company. Proxy adviser Institutional Shareholder Services (ISS) and New York City’s public employee pension funds have criticized the automaker’s handling of these issues.

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Despite the opposition, mostly from overseas investors, Toyoda remains popular among retail investors, who account for 12.6% of the automaker’s shareholders. Toyota’s shares have fallen 10% since the new revelations, but are still up 18% for the year.

Why It Matters: Prior to the AGM, several key investors had expressed their intention to vote against Toyoda’s re-election due to concerns about his continued influence over the company. This follows a series of scandals, including discrepancies in vehicle certifications that conflict with United Nations standards, potentially impacting Toyota's operations globally. The Japanese transport ministry even halted the sales and deliveries of six models, three of which are Toyota’s.

Furthermore, Toyota’s market value plunged over $15 billion amid the test falsification scandal, leading to a significant drop in the stock prices of these automakers.

Price Action: Toyota shares closed 1% lower at $195.15 on Tuesday, with an after-hours price of $196, according to Benzinga Pro. The 52-week high is $255.23 and the 52-week low is $152.78.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari