This was the first general meeting since Ivan Espinosa was appointed head of Nissan Motor in April, replacing Makoto Uchida. A long-time Nissan executive, Espinosa inherits a worrying financial situation: the stock has lost about 36% of its value in a year, dividends have been suspended, and the group posted a net loss of $4.5bn for the last fiscal year. Nissan is also forecasting a loss of 200 billion yen ($1.38bn) in Q1, without giving any annual forecasts at this stage.
In an attempt to turn the company around, Espinosa has unveiled a drastic cost-cutting plan that includes closing seven plants and deleting 20,000 jobs, or about 15% of the workforce. This move has angered some shareholders. One of them have accused the board of directors of "shifting the blame onto frontline employees" while retaining its positions. Others criticized the elimination of dividends, calling for board reform or risk eroding investor and employee confidence.
Several resolutions, including some from activist shareholders, were rejected in the vote, although the detailed results are not yet known. Amongst the proposals rejected was one from Strategic Capital, a Tokyo-based shareholder, which called on Nissan to take action on the case of its listed subsidiary Nissan Shatai. The latter, which is 50%-owned by Nissan, assembles vehicles for the group. Strategic Capital, which owns 3.5% of Nissan Shatai and a minority stake in Nissan, argued for a change in the articles of association requiring the manufacturer to assess its relationships with its listed subsidiaries on an annual basis and to report on the measures envisaged.
Nissan's board of directors opposed the proposal, arguing that such a change would compromise its ability to adapt. This position comes as the Tokyo Stock Exchange and regulators are putting increasing pressure on Japanese companies to end so-called "parent-child listing" structures, which are considered detrimental to minority shareholders and governance.
The Nissan case is part of a broader context of reforms within Japanese industry. Toyota recently announced a complex $33bn deal to buy back its listed subsidiary Toyota Industries. "Toyota acted because it felt pressure from shareholders and felt it was necessary to change," said Tsuyoshi Maruki, managing director of Strategic Capital, in an interview the day before. He hopes Nissan will take a similar stance.
