Advisory firm Glass Lewis recently reversed its position, recommending that shareholders support the re-election of Akio Toyoda as Chairman of Toyota Motor (NYSE:TM) during the upcoming June AGM. This shift in stance comes after the firm advised against his re-election for two consecutive years. Proxy advisor ISS has similarly changed its view, pushing for Toyoda’s continued leadership in the company.

Shareholder Backing Trends

• In 2024, Toyoda received just 72% of shareholder support, a notable decline from the 85% and 96% support he garnered in 2022 and 2023, respectively.

• Toyoda warned that any further decline in support could jeopardize his position on the board, highlighting the importance of this year’s vote.

Reasons Behind This Change

• Leadership Continuity: Under Toyoda’s guidance, Toyota has tackled challenges like chip shortages, introduced its innovative bZ electric vehicle lineup, and invested in hydrogen technologies.

• Enhanced Governance: The board has implemented governance reforms, including increasing independent director quotas and refining audit committees, addressing prior concerns from proxy advisors.

Analyst Outlook and Prospects

Toyota maintains strong fundamentals, with analysts projecting a 15% upside based on the consensus price target. Current expectations set the median target for TM at $205, indicating promising potential for shareholder returns under Toyoda’s leadership.

Proxy Filing Access

Those interested in the detailed governance proposals and board renewal resolutions can review Toyota’s official proxy filing through entreprenerdly.com.

With both Glass Lewis and ISS now supporting Toyoda, shareholders have clear guidance as they navigate the balance between stable leadership and demands for increased oversight, marking a critical juncture for Toyota’s governance direction.