20% of Toshiba shareholders reject activist candidates

20% of Toshiba shareholders reject activist candidates

The final voting results showed that more than 20% of Toshiba Corp shareholders voted against a dissident external director and two board directors from activist hedge fund investors.

In Japan, such a level of opposition to company-backed candidates is rare, although cases of rejection are on the rise as shareholder activism begins to take root. Last year, Toshiba shareholders voted out the chairman in a rebuke of the company after it was found to have colluded with the government in suppressing foreign investor interests.

23% of shareholders voted against her, as the external director Mariko Watahiki opposed the candidacy of directors from Elliott Management and Farallon Capital Management. She had the lowest support rate, 64%, among 13 director nominees.

Watahiki resigned after the shareholder's meeting on Tuesday. The former high court judge said that the appointments of the two could skew the board too much towards the input of activist investors.

Nabeel Bhanji, a senior portfolio manager at Elliott, and Eijiro Imai, managing director at Farallon, both had opposition rates of around 22%, while about 78% supported them.

Chief Executive Taro Shimada received 86% of the vote, with more than 12% abstaining.

Seven new board directors were appointed and six including Watahiki were reappointed on Tuesday.