The US$2.5 billion ($3.2 billion) company’s biggest shareholder, DIC, an ink maker that has long been a “stable shareholder” with its 20.04% stake, has come out against Sato.
DIC criticised Taiyo as being slow in setting up a committee to study an acquisition proposal and in pushing ahead for talks with the prospective buyer.
Joining DIC in calls for Sato’s ouster were the company’s second and the third biggest shareholders — activist fund Oasis Management Co. and a holding company owned by Taiyo’s founding family. The company’s three biggest shareholders own about 37% of the shares outstanding.
Japan’s governance reforms have emboldened shareholders, who are now increasingly vocal about their demands.
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Although there has been a decline in support for board executives at company AGMs in recent years, it is still rare for a company’s proposals to be outright rejected at an AGM.
Other Taiyo shareholders such as California State Teachers’ Retirement System also announced opposition to Sato after proxy adviser Glass Lewis recommended voting against him.
Still, Sato has his supporters. Rival proxy adviser ISS says Taiyo’s strong earnings growth over the last five years is a reflection of its solid market position in resist ink used for printed circuit boards and semiconductors.
