Shareholder Proposals Hit Record in Japan in Quest for Returns

Corporate Japan is bracing for a record number of shareholder proposals at their annual general meetings later this month as investors demand more returns and better governance.

(Bloomberg) — Corporate Japan is bracing for a record number of shareholder proposals at their annual general meetings later this month as investors demand more returns and better governance.

The jump in proposals comes as Tokyo Stock Exchange urges Japanese firms to take steps to bolster their valuations. Expectations of increased shareholders returns have helped propel a rally in Japanese equity prices this quarter, with the Nikkei 225 Stock Average posting the biggest gains among major markets. 

A record 90 Japanese listed companies have received proposals from shareholders, according to analysts at Mitsubishi UFJ Trust & Banking Corp. They include calls for more share buybacks, higher dividends and, in some cases, control of the board. In total, firms with a combined market capitalization of 81 trillion yen ($571 billion) face such proposals, up from 33 trillion yen last year.

While activist shareholders are pushing Japanese managers for more changes at AGMs that in the past faced little opposition from stock owners, the number of proposals still lags the bigger US market. AGMs at Russell 3000 companies saw shareholder proposals rise 3.3% from a year earlier to a record 682 in the first five months of 2023, as diversity issues and anti-ESG sentiment fueled activism, according to a report from ISS Corporate Solutions.

Company executives in Japan are also facing increased threats of being voted out by shareholders as they demand more diversity in the board. Fujio Mitarai, longtime chairman of Canon Inc., almost got voted out at the camera-maker’s AGM in March, scraping by with a wafer-thin majority of 50.59%.

More than a quarter of listed Japanese firms hold their AGMs on June 29 while another 17% will meet on June 23.   

Here are three key themes to watch for:


  • Secom Co. (June 27): Dalton Investments is calling for share buybacks of up to 180 billion yen.
  • Obayashi Corp. (June 28): Silchester International Investors proposed special dividend of 12 yen per share.


  • Cosmo Energy Holdings Co. (June 22): City Index Eleventh is opposing reappointment of President Shigeru Yamada and a poison pill provision proposed by the company’s management to prevent investors getting controlling stakes.
  • Toyo Construction Co. (June 27): Yamauchi No. 10 Family Office, run by Nintendo Co.’s founding family, is making a tender offer for the firm and is looking to reshuffle the board.
  • Hokuetsu Corp. (June 29): Oasis Management is calling for the ouster of CEO Sekio Kishimoto
  • Kumagai Gumi Co. (June 29): Oasis Management is calling for voting against President Yasunori Sakurano. It’s also proposing a share buyback of up to 20% of its outstanding shares and higher dividend payouts.


  • Banks (Mizuho Financial Group Inc., on June 23, Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. on June 29): Proxy advisory firm Institutional Shareholder Services is recommending voting against the reappointment of top executives of MUFG, SMFG, and Mizuho for allocating too much capital on cross-shareholdings.


  • Iyogin Holdings Inc. (June 29): An individual investor is demanding the company to keep buying back shares every year until its price-to-book ratio rises above one. The investor is also making a satirical proposal to change the bank’s name to “Iyogin Putting-Internal-Reserve-First Real Estate Co. Limited”, saying the company management is interested in capital spending for buildings and ignoring shareholders.

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