Based on Ezaki Glico’s disclosed voting results and approval ratios from the Annual General Meeting of Shareholders, we are issuing our views on the outcomes of this AGM, including the shareholder proposals submitted by Dalton Investments.
The voting results and approval ratios for resolutions at Ezaki Glico’s Annual General Meeting of Shareholders have been disclosed.
Approval ratios for shareholder proposals
- Election of directors
James B. Rosenwald III: 26.9%
Junichiro Sano: 28.5%
- Share repurchase: 30.5% (21.6% last year)
- Expansion of restricted stock compensation: 26.8% (15.6% last year)
- Amendment to the articles of incorporation regarding responses to Tokyo Stock Exchange requests: 23.5% (18.1% last year)
Ezaki Glico’s disclosure (in Japanese) can be found here.
While all four shareholder proposals submitted by Dalton were voted down, Dalton’s two board of director election proposals received approval ratios close to 30%, and our other three shareholder proposals achieved higher approval ratios than last year. We believe that these results are highly meaningful and reflective of the increasing support that our shareholder proposals are receiving from fellow Ezaki Glico shareholders.
In addition, approval ratios for proposals to reappoint existing directors declined by an average of 8.6% year-on-year across all directors, and by an average of 13.1% when limited to outside directors. This is a recurring trend from last year’s AGM, when approval ratios for director reappointment proposals declined by an average of 9.8% from the prior year.
We believe these results indicate that shareholders have serious concerns about Ezaki Glico’s current management structure, including its outside directors, and their ability to address structural issues such as 1) sustainable improvements in ROE; 2) addressing issues related to loss leading businesses such as the daily business and 3) corporate governance issues that impair shareholder value.
We expect Ezaki Glico to take decisive action to address these issues. We also look to those outside directors appointed to enhance oversight from a minority shareholder perspective and contribute to initiatives aimed at maximizing corporate value.
We plan on continuing our constructive dialogue with Ezaki Glico, with a view to achieving sustainable improvement in shareholder value and realizing an appropriate share price reflective of the company’s strong branding and underlying business fundamentals.