Proxy Advisers Tell Nissan Shareholders to Vote Against CEO's Reappointment
Two proxy advisory firms have reportedly encouraged shareholders to vote against reappointing Hiroto Saikawa as Nissan’s chief executive. While it’s relatively uncommon to see voting research providers issue such an overt recommendation, it’s not unheard of.
Institutional Shareholder Services (ISS) suggested shareholders vote against Saikawa at Nissan’s annual general meeting later this month, citing his closeness to Carlos Ghosn as a liability. According to Reuters, the firm believes the automaker should try to distance itself from the recent past as much as possible.
“When the company needs to break from the past and build a strong board with fresh members, the reelection of Hiroto Saikawa, who has been on the board for 14 years and worked closely with Carlos Ghosn, does not appear appropriate,” ISS said in a Friday research note to investors.
Despite his success in bringing Nissan back from the brink of disaster and organizing the Renault-Nissan-Mitsubishi Alliance, Ghosn’s name is now a dirty word. We’ve covered his alleged financial misconduct endlessly and added that the situation hasn’t shown the manufacturer’s top brass in a particularly flattering light.
Japan’s poor treatment of Ghosn has also helped to drum up public sympathy as the exec maintains he was subjected to an industrial coup organized by Nissan executives. While there’s little evidence to support such claims, Saikawa’s about-face on his retirement and ongoing rumors that he was about to be fired by Ghosn prior to his arrest could encourage negative speculation.
Saikawa, who was handpicked by Ghosn for his leadership role, has also stood in the way of numerous attempts from Renault to merge the two automakers. This has further strained the two automakers already fractured relationship. However, it could be argued that Renault’s constant pressure to incorporate is just as much to blame.
At any rate, Institutional Shareholder Services clearly thinks it’s best for Nissan to cut ties with Saikawa and start fresh. Glass Lewis advised investors similarly, saying it could not confidently “support the nomination of Mr. Saikawa who — as the representative director and president of the Company — should have taken greater steps in performing its oversight responsibilities in the misconduct of the board members.”
It will be interesting to see if the shareholders listen. Despite there being a fair amount of negative publicity surrounding the CEO of late, many Japanese investors see him as essential in keeping French influence away from the Japanese company. Saikawa will need at least half of voting shareholders to take his side at Nissan’s annual general meeting on June 25th if he’s to be reappointed.
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