Toyota Chairman's Pay Hits $10M Despite Shareholder Concerns And Safety Probe

Amid scrutiny over governance and safety issues, Toyota Motor Corp. TM Chairman Akio Toyoda has seen a substantial increase in his compensation package for the fiscal year 2023.

What Happened: According to an annual securities report filed Tuesday, Toyoda has been awarded a pay raise to $10.2 million during the 2023 fiscal year, Bloomberg reported. This increase comes in a year marked by a government safety probe and diminishing shareholder support.

Toyoda’s earnings, comprising salary, bonuses, and shares, are still less than those of his counterparts at Stellantis NV and General Motors Co., where CEOs have higher compensation packages. The pay raise has sparked controversy, especially since shareholders who backed Toyoda’s reappointment at the annual meeting hit a record low since 2010.

Despite the governance concerns, Toyota has reported record operating income and has maintained its lead as the world’s top vehicle manufacturer, surpassing Volkswagen AG for the fourth year in a row. Toyota‘s CEO Koji Sato, who recently joined the board, received ¥623 million ($3.9 million) in compensation.

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Why It Matters: Toyoda’s reappointment and pay raise are significant in light of recent events. Despite recommendations against Toyoda’s re-election by leading proxy advisers, he was re-elected. This was attributed to Toyota’s strong business performance, its shareholdings by other Toyota group firms, and Toyoda’s popularity among Japanese retail investors.

However, the drop in shareholder support to 85% from 96% in the previous year signaled a call for governance reforms. Additionally, Toyota’s strategic divestitures, selling 325.9 billion yen ($2.04 billion) in cross-shareholdings of listed companies, reduced its portfolio significantly from 2015 levels.

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