Minority shareholders, particularly foreign investment firms, have become increasingly vocal about the management of Japanese companies. This week four investment firms called for the ouster of LIXIL Group's CEO, citing corporate governance concerns.

A lack of share buybacks has long been a sore spot for foreign investors in Japan. But this year, buybacks have hit a record, with SoftBank Group Corp, Sony and Nintendo all among the cash-rich companies that have bowed to pressure from investors and government to boost returns and improve governance.

"We are concerned by the lack of a concrete, significant share repurchase program, which would have corrected the inefficient capital structure and suboptimal return on equity," Aaron Stern, managing director at Fir Tree, said in a statement.

A Kyushu Railway spokesman declined to comment. The company said in its medium-term plan announced last week it is considering a stock compensation plan.

Fir Tree, which has held a stake in the railway operator, better known as JR Kyushu, since its 2016 listing, said in December it had increased its holding to 5.1 percent, calling the firm "significantly undervalued".

Fir Tree also said it planned to make shareholder proposals at the company's upcoming annual general meeting.

Shares of Kyushu Railway finished little changed at 3,660 yen on Friday.

(Reporting by Sam Nussey; Editing by David Dolan and Muralikumar Anantharaman)