Toyota’s Akio Toyoda re-elected as chairman amid $33 billion buyout spotlight

Toyota Motor’s shareholders have voted to re-elect Akio Toyoda as chairman, signaling strong domestic investor confidence despite growing unease from international stakeholders over a $33 billion buyout proposal involving a key group company.

The vote took place at Toyota’s annual general meeting on Thursday, with Toyoda—grandson of the company’s founder and its former CEO—retaining his post. Notably, this is the first time in three years that neither of the two major proxy advisory firms, Glass Lewis and Institutional Shareholder Services (ISS), advised against his reappointment. In previous years, both had raised concerns about corporate governance and board independence.

The detailed vote count has not yet been made public, leaving it unclear whether Toyoda improved upon last year’s 72% approval—his lowest on record as a Toyota director. His re-election comes at a time when Toyota is pursuing a controversial plan to fully acquire Toyota Industries Corporation, a forklift and auto parts maker originally spun out from Toyota’s parent company.

The proposed ¥4.7 trillion ($33 billion) deal would involve taking Toyota Industries private, a move the automaker claims would help strengthen synergies within the Toyota Group and foster long-term innovation in mobility solutions. As part of the transaction, Chairman Toyoda has pledged to personally invest ¥1 billion, underscoring the strategic importance he places on the deal.

However, the buyout has drawn criticism from foreign investors, who argue the offer undervalues Toyota Industries’ true worth and may erode protections for minority shareholders. Some also view it as a consolidation of power within the founding Toyoda family at the expense of transparency and governance.

At a separate shareholder meeting on Tuesday, Toyota Industries executives faced tough questions from investors over the fairness and structure of the proposed acquisition. Toyoda, who does not sit on Toyota Industries’ board, did not attend that meeting. Still, the automaker has attempted to address concerns through its internal media platform, Toyo Times, where it explained the rationale for the acquisition.

One attendee at Toyota Motor’s AGM, Akihiro Horiuchi, expressed confidence in the company’s direction. “There had already been a lot in the press about Toyota Industries, so I think many shareholders thought they had enough information,” he said. “Toyota is the best company in Japan and I think it will continue to grow.”

Founded in 1926 as Toyoda Automatic Loom Works, Toyota Industries gave birth to the Toyota Motor we know today. The proposed reintegration reflects the company’s broader strategy to align its industrial roots with its ambitions in future mobility.

Although shareholder support for Toyoda has waned in recent years—from 96% in 2021 to 72% in 2023—this year’s backing by proxy advisers may signal a temporary easing of governance concerns. Still, Toyoda himself has acknowledged that continued decline in support could put his leadership at risk.

Summary:

Toyota Motor has re-elected Akio Toyoda as chairman, even as the company faces scrutiny over a ¥4.7 trillion ($33 billion) bid to take Toyota Industries private. While domestic investors showed support, international shareholders remain concerned about valuation fairness and governance. The deal could reshape the Toyota Group’s future but may also strengthen family control—a point of contention for global stakeholders.

FAQs: Toyota’s Chairmanship Vote and Buyout Bid

Q1. Why is Akio Toyoda’s re-election as chairman significant?

Akio Toyoda is the grandson of Toyota’s founder and a key figure in the company’s recent transformation efforts. His re-election signals continued support from domestic investors despite governance concerns raised in previous years. This year, for the first time in three years, he was not opposed by major proxy advisory firms.

Q2. What is the $33 billion Toyota Industries buyout about?

Toyota Motor is seeking to fully acquire Toyota Industries Corporation in a deal valued at around ¥4.7 trillion ($33 billion). The move would involve taking the company private to deepen integration and long-term collaboration across Toyota Group businesses.

Q3. Why are foreign investors critical of the deal?

Some foreign shareholders believe the buyout undervalues Toyota Industries and unfairly disadvantages minority shareholders. They also view it as a step that could consolidate power within the founding Toyoda family, raising corporate governance concerns.

Q4. What role is Akio Toyoda playing in the buyout?

Although Toyoda is not on Toyota Industries’ board, he is personally investing ¥1 billion in the transaction. His involvement reflects the strategic importance of the deal and his intent to align the group’s operations under a unified vision for mobility.

Q5. How have proxy advisers responded this year?

Both Glass Lewis and Institutional Shareholder Services (ISS), which had previously advised voting against Toyoda due to governance issues, recommended shareholders support his re-election this year. No specific reasons were disclosed for the change in stance.

Q6. What does Toyota hope to achieve with this acquisition?

Toyota aims to eliminate short-term profit pressures at Toyota Industries and enhance collaboration across the group. The broader goal is to support innovation in mobility technologies and strengthen the Toyota Group’s identity as a next-generation mobility company.

Q7. Has shareholder support for Akio Toyoda changed over time?

Yes. Shareholder support for Toyoda has declined over the past few years—from 96% in 2021 to 85% in 2022 and down to 72% in 2023. This year’s result is not yet disclosed, but the shift in proxy adviser recommendations could have improved his numbers.

Q8. What is Toyota Industries’ historical connection to Toyota Motor?

Toyota Industries, originally founded as Toyoda Automatic Loom Works in 1926, created the automotive division that later became Toyota Motor. The two companies have remained closely linked, with Toyota Industries still holding a significant stake in Toyota Motor.