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Toyota’s annual meeting this year has turned into a showdown over the merits of longtime leader Akio Toyoda’s electric-vehicle strategy, which has been more cautious than some other automakers.
Toyota’s annual meeting this year has turned into a showdown over the merits of longtime leader Akio Toyoda’s electric-vehicle strategy, which has been more cautious than some other automakers.
Shareholders including the New York City comptroller’s office, the California Public Employees’ Retirement System and a handful of European asset managers say they have voted or plan to vote to oust several Toyota directors including Toyoda from their board seats at the meeting Wednesday.
Shareholders including the New York City comptroller’s office, the California Public Employees’ Retirement System and a handful of European asset managers say they have voted or plan to vote to oust several Toyota directors including Toyoda from their board seats at the meeting Wednesday.
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While citing governance issues as one reason, they say their vote is also a protest against Toyoda’s policy of not setting a date by which the carmaker’s lineup will be all electric.
“Toyota is failing to lean, like its peers, into a timely transition to an electric fleet,” said Brad Lander, the New York City comptroller. “We want to be persuaded that there is a transition under way and that they’ll take meaningful steps toward an all-EV commitment.”
Toyoda, who became Toyota’s chairman in April after nearly 14 years as president, has been a rare voice of caution within the auto industry when it comes to EVs. Toyoda says the world isn’t ready to go all electric, citing problems such as inadequate charging infrastructure, shortages of battery materials and the reliance of many nations on carbon-emitting fossil fuels for electricity.
Under new Chief ExecutiveKoji Sato, Toyota is hastening its push into fully electric cars, though it hasn’t set a date for when its lineup will be all EV, in contrast to others including General Motors and Honda. Toyota has sold more hybrid gas-electric vehicles than any other automaker and says hybrids can serve as a bridge between traditional cars and EVs.
Toyota says it is committed to making its operations carbon neutral by 2050 and at least halving its new-vehicle carbon emissions by 2035, compared with 2019 levels.
“Even in this difficult business environment, Chairman of the Board Akio Toyoda has been strengthening our competitiveness from a long-term perspective,” a spokesman for the company said.
All sides agree the chance that Toyoda will be ousted from the board at the meeting is minuscule, but even a modest decline in support would be considered an embarrassment in Japan’s consensus-based corporate culture. In recent years, shareholders have used protest votes against executives as a way to nudge companies toward their positions and sometimes have achieved results after a few rounds.
Supporters hail Toyoda for building the world’s top-selling automaker and Japan’s most valuable company by market capitalization.
At Toyota’s annual meetings, it isn’t uncommon for individual investors to stand up and tearfully thank Toyoda, the grandson of the auto maker’s founder, for his leadership. His renomination to the board earned 96% approval at the car maker’s annual shareholder meeting a year ago.
Anders Schelde, chief investment officer of Danish fund AkademikerPension, said the fund opposed Toyoda’s plan to retain his board seat even after yielding the CEO spot because it views the board as containing too few independent directors.
By Toyota’s count, four of 10 director nominees are independent, which the company says ensures sufficient board objectivity.
The Danish fund is also unpersuaded by Toyota’s EV-transition plans.
Toyota is losing out on profits from EVs in regions of the world such as the U.S. and Europe where sales have rapidly picked up, Schelde said.
“From an investor perspective, we seek highest profits and responsible investment, and Toyota’s EV strategy is simply not looking attractive,” he said.
Schelde said new CEO Sato’s EV targets looked better, but now it is a question of whether Toyota can achieve them.
AkademikerPension, along with two other European asset managers, submitted a shareholder proposal this year to make management reveal more about its lobbying in favor of vehicles that aren’t fully battery powered.
The fund tried to submit a similar resolution last year but Toyota said it missed the submission deadline. This year, AkademikerPension was successful in getting its proposal to a shareholder vote, but it still faces long odds.
Toyota’s board opposed the proposal, saying the company already reports on its climate-related public-relations activities.
Ahead of this year’s general meeting, Toyota representatives flew out several times to meet with management at AkademikerPension in Denmark, people involved in the meetings said. In discussions, Toyota tried to nudge the fund to pursue dialogue instead of a proposal and highlighted the company’s recent ramp-up of its EV activities, the people said.
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