June 2026 annual shareholders’ meeting season notable shareholder proposal cases

• The number of shareholder proposals during the June 2026 general meeting season remains at a high level, continuing last year's trend.
• Alongside the usual balance sheet- and governance-related proposals, this year also brought some distinctive proposals, including calls from specific shareholders for companies to repurchase their shares and proposals to abolish takeover defenses.
• The Tokyo Stock Exchange announced amendments to its disclosure rules to require listed companies with a parent company or a major shareholder holding 40% or more of the voting rights to enhance disclosures regarding management-proposed director elections as part of its minority shareholder protection efforts; how companies handle these disclosures at next year's general meetings may be worth watching.

Shareholder proposals remained at a high level during the June 2026 general meeting season

According to news reports, 106 listed companies received shareholder proposals at their June 2026 annual general meetings, just short of last year's record of 114 companies. According to our calculations, 153 proposals were submitted to these companies by institutional investors who may be termed activists or be engaging in activism. Shareholder proposals from activists in Japan have traditionally focused on balance sheet-related issues, such as dividends from retained earnings or other financial restructuring measures. However, continuing last year's trend, governance-related proposals such as appointment or removal of directors are also on the rise. This year's June meetings featured several notable proposals as well, including three proposals regarding share buybacks from specific shareholders and six seeking the abolition of takeover defense measures. Shareholder proposals were approved at two companies, both sets of shareholder proposals being two director nominations.

Proposals urging companies to buyback shares from specific shareholders

One notable trend at this year's annual general meetings was a series of shareholder proposals submitted by Strategic Capital ("SC") calling for the repurchase of shares from specific shareholders pursuant to Article 160 of the Companies Act. All proposals were rejected, but each garnered high approval rates. These proposals push for the sale of shares held by major shareholders to resolve listed parent-subsidiary structures and strategic shareholding to strengthen the voices of minority shareholders' vis-à-vis management.

A vote on a proposal regarding the share buyback from a specific shareholder requires a special resolution, i.e., a two thirds supermajority. On the other hand, such shareholder, which would be the seller, is not permitted to vote. Consequently, such proposal tends to reflect minority shareholders' sentiment more accurately than it would if the specific shareholder were permitted to vote. That said, the hurdle for the proposal to be approved remains high given that a special resolution is required. Furthermore, as the companies receiving such proposals themselves have pointed out in their opposing arguments,¹²³ even if the proposals were approved, it would not obligate either the company or the specific shareholder to complete the sale. Nevertheless, high approval rates on such proposals are a useful gauge of the view of minority shareholders toward controlling shareholders.

At the general meeting held in March this year, SC submitted a proposal calling for GungHo Online Entertainment to buy back shares from its major shareholders, and the proposal received a 30.6% approval rate.⁴ At the June general meeting, SC submitted a shareholder proposal to Goldcrest, calling for the company to buy back shares from its President and CEO, which received 50.4% approval.⁶ Furthermore, a proposal submitted to Osaka Steel calling for the company to acquire shares from its parent company, Nippon Steel—effectively a proposal aimed at unwinding the parent-subsidiary dual listing⁷—received a high approval rate of 63.6%, coming close to being passed.⁸

Perhaps in response to these results, other activist funds are following suit, such as Nanahoshi Management, founded by a former-SC analyst. Nanahoshi submitted a proposal at the Pasona Group, Inc. shareholders' meeting held on August 23, calling for the company to buy back shares from the founding family shareholders, which garnered a 21.0% approval rate.⁹¹⁰

Although the likelihood of these proposals directly leading to a sale of shares may appear to be low, other activists may also adopt this approach as a means of prompting listed companies to reconsider whether the continued presence of a specific shareholder, such as a major shareholder or founding family shareholder, contributes to enhancing the company's corporate value. It remains to be seen whether these proposals become more common going forward.

Proposal to abolish takeover defenses

According to reports, the adoption rate of takeover defense measures among listed companies has been on a downward trend since peaking at 569 companies at the end of 2008, falling to 239 companies as of the end of March 2026. While takeover defense measures are expected to continue to be used in response to stakebuilding and takeover proposals, shareholders are increasingly scrutinizing whether these measures serve a legitimate strategic purpose or merely entrench management. This year, proposals to abolish takeover defense measures have been seen sporadically, including six proposals at the June general meetings. In particular, the following two proposals submitted at the March and June general meetings, although ultimately rejected, garnered a significant level of support.

At the 76th Annual General Meeting of Shareholders of Noritz Corporation held on March 27, 2026, LIM Japan Event Master Fund proposed the abolition of Noritz's policy regarding large-scale acquisitions (i.e., takeover defense policy). The proposing shareholder pointed out that Noritz's price-to-book ratio (PBR) has persistently stayed below 1 due to excess capital and argued that takeover defense measures—which could be abused by management for self-preservation—should be abolished.¹¹ Furthermore, they cited the Ministry of Economy, Trade and Industry's Guidelines on Corporate Takeovers, which state that if a company is considering introducing a policy to counter takeovers, "it is required, first and foremost, to consistently make reasonable efforts to enhance corporate value on a day-to-day basis, and to work to ensure that this is reflected in its market capitalization." The proposing shareholder criticized Noritz, arguing that given Noritz's PBR, the company has not made sufficient efforts or taken adequate measures on that front. Although the proposal was rejected, the percentage of votes in favor reached 40.3%. According to the Board's opinion on the shareholder proposal,¹² LIM Japan Event Master Fund held only a 0.07% voting stake at the time of the proposal, suggesting that the proposal to abolish the takeover defense measures garnered highly significant support from shareholders other than the proposing shareholder.

At the 135th Annual General Meeting of Shareholders of Iino Kaiun Co., Ltd., held on June 25, 2026, LIM Japan Event Master Fund also put forward a similar proposal to abolish Iino Kaiun's policy on large-scale acquisitions (i.e., policy on responding to takeovers). The proposing shareholder pointed out that Iino Kaiun's PBR has persistently stayed below 1 and argued that takeover defense measures that enable management to "treat the company as their personal property" and risk harming the collective interests of shareholders should be abolished.¹³ As with Noritz, they cited the Ministry of Economy, Trade and Industry's Guidelines on Corporate Takeovers and criticized Iino Kaiun for failing to make sufficient efforts or take adequate measures as required by the guidelines given its PBR. Although the board opposed the proposal and the proposal was ultimately rejected at the general meeting, the percentage of votes in favor reached 33.70%.

Tokyo Stock Exchange strengthens disclosure requirements for proposals on director election at companies with major shareholders

On July 3 this year, the Tokyo Stock Exchange (TSE) published an amendment rule titled "Partial Amendments to the Securities Listing Regulations concerning the Review of Listing Systems for the Protection of Minority Shareholders."¹⁴ As a result, listed companies with a parent company or a major shareholder holding 40% or more of the voting rights will be required to disclose the number of votes cast in favor or abstained by minority shareholders regarding company-proposed director elections, and the resulting approval percentage. Furthermore, if a proposal fails to secure the approval of more than 50% of minority shareholders, the company must also disclose the board's plan for addressing the reasons for opposition raised by minority shareholders, and, within six months of the general meeting, disclose the status of implementation of such plan and any additional measures taken.

TSE's rationale for expanding these disclosure requirements is that there have been instances where a majority of the minority shareholders' votes casted were against proposals such as the election of representative directors,¹⁵ signaling that management is now expected to take minority shareholders into account.

There were several instances at this year's meetings where the approval rate for company-proposed director elections remained low. For example, at Wacom,¹⁶ AVI submitted a shareholder proposal to remove President Nobutaka Ide from the board,¹⁷ and the approval rate for his reappointment was only 64.3% (while the approval rate for his removal was 24.6%).¹⁸ At Eiken Chemical,¹⁹ where Dalton Investment had submitted its own director election proposal, the company's proposal to elect two directors received just over 54% of the vote—barely over a majority—while the approval rates for the shareholder-proposed candidates all exceeded 45%.²⁰

Not only were the approval rates for the company's proposals low, but there were also cases where shareholder-proposed directors were elected. At Synchro Food,²¹ the two candidates proposed by LIM Japan Event Master Fund²² were elected as directors with more than 60% approval, while three of the company's proposed directors were voted down.²³

The TSE's enhanced disclosure requirements take effect for general meetings relating to fiscal years ending on or after December 1, 2026, meaning that affected companies will need to comply with these disclosure requirements starting with next year's general meeting. How affected companies respond will be worth watching.

Shareholder proposals by activist funds at the June 2026 shareholder general meetings which received over 30% support²⁴

According to our calculations, out of the 154 shareholder proposals submitted by activist investors at the June 2026 shareholders' meetings, 19 proposals received support of 30% or more as follows.

_{1 Goldcrest Co., Ltd. "Notice Regarding Receipt of a Document Concerning the Exercise of Shareholder Proposal Rights and the Opinion of the Company's Board of Directors" (May 15, 2026)
2 GungHo Online Entertainment, Inc. "Notice of Convocation of the 29th Annual General Meeting of Shareholders" (March 11, 2026)
3 Osaka Steel Co., Ltd. "Notice Regarding Receipt of a Document Concerning the Exercise of Shareholder Proposal Rights and the Opinion of the Company's Board of Directors" (May 12, 2025)
4 GungHo Online Entertainment, Inc. "Extraordinary Report" (April 2, 2026)
5 Goldcrest Co., Ltd. "Notice of Convocation of the 35th Annual General Meeting of Shareholders" (June 3, 2026)
6 Goldcrest Co., Ltd. "Extraordinary Report" (June 19, 2026)
7 Osaka Steel Co., Ltd. "Notice of Convocation of the 48th Annual General Meeting of Shareholders" (June 2, 2026)
8 Osaka Steel Co., Ltd. "Extraordinary Report" (June 25, 2026)
9 Nanahoshi Management (UK), "Toward Enhancing Shareholder Value at the Pasona Group (2168)"
10 Pasona Group Inc., Extraordinary Report dated August 31, 2026, submitted principal document retrieved via Document Content Inquiry https://disclosure2.edinet-fsa.go.jp/WZEK0040.aspx?S100YZN1
11 Noritz Corporation Notice of Convocation of the 76th Annual General Meeting of Shareholders
12 "Notice Regarding the Board of Directors' Opinion on Shareholder Proposals" (February 10, 2026)
13 Iino Kaiun Co., Ltd. Notice of Convocation of the 135th Annual General Meeting of Shareholders
14 Tokyo Stock Exchange: "Partial Amendments to the Securities Listing Regulations concerning the Review of Listing Systems for the Protection of Minority Shareholders" (July 3, 2026)
15 Tokyo Stock Exchange: "Review of Listing Rules Regarding the Protection of Minority Shareholders (Supplementary Explanatory Materials for Listed Companies)" (March 27, 2026; updated July 3, 2026)
16 Wacom Co., Ltd. "Notice of Convocation of the 43rd Annual General Meeting of Shareholders" (June 3, 2026)
17 Ibid.
18 Wacom Co., Ltd. "Extraordinary Report" (July 1, 2026)
19 Eiken Chemical Co., Ltd. "Notice of Convocation of the 88th Annual General Meeting of Shareholders" (June 8, 2026)
20 Eiken Chemical Co., Ltd. "Extraordinary Report" (June 24, 2026)
21 Nikkei Shimbun, June 25, 2026, "Synchro Food: Two Directors Proposed by Activists Take Office"
22 Synchro Food Co., Ltd., "Notice of Convocation of the 23rd Annual General Meeting of Shareholders" (June 5, 2026)
23 Synchro Food Co., Ltd. "Extraordinary Report" (June 25, 2026)
24 All numerical data were calculated by White & Case LLP based on search results from XeBral ADDS and other publicly disclosed materials.}

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