Toyota shareholders vote for Akio Toyoda’s re-election

Toyota Motor shareholders backed chair Akio Toyoda and nine other members of the carmaker's board on Tuesday, despite concerns about governance raised by two leading proxy advisers.

Toyoda's re-election as chair was a focal point of its annual shareholder meeting after the proxy advisers recommended investors vote against it.

Shareholders also rejected an investor proposal urging greater disclosure of climate lobbying that had been opposed by Toyota. The breakdown of both votes will not be released until Wednesday.

The grandson of the company's founder, Toyoda remains deeply popular among retail shareholders. He has been praised for steering the company to another year of record profits and a strong stock performance last year.

"I bought Toyota shares with my retirement bonus," 84-year-old Hidenori Takahashi told Reuters ahead of the meeting, adding he believed it was the "best company in Japan" for shareholders.

He said the ongoing certification issues that had roiled the carmaker were "a bad thing" but Toyoda seemed eager to take steps to prevent the wrongdoing from recurring.

While Toyoda faced little risk of not being re-elected, a big fall in his approval rating could be an embarrassment for a company that has been the world's top-selling carmaker for four years in a row.

Toyoda's approval rating fell to 85% last year from 96% in 2022.

The carmaker has been bedevilled by safety and other certification testing violations at Toyota and its group companies, including small car maker Daihatsu. Institutional Shareholder Services had taken issue with the way the carmaker has dealt with problem.

Glass Lewis, which had recommended Toyoda not be re-elected for a second year in a row, said he is responsible for the board's lack of independence ando cited concerns about its strategic shareholdings and return on equity.

More certification irregularities have come to light since the proxy advisers made their recommendations.

In early June, Toyota said it had wrongly conducted six different vehicle certification tests in the past, including for three models that were still being sold.

It has said its wrongdoing included conducting some tests under more strict conditions than those set out by the government, invalidating their results.

Toyota has told Reuters previously that taking stock of its mistakes was long rooted in its corporate culture and Toyoda would take the lead in reinstilling that culture and working with group companies to ensure effective governance.

Toyota's shares have fallen 10% since the new revelations came to light, but are up 18% for the year.