TOKYO: Seven & i Holdings Co Ltd has voted down a management proposal to replace the president of its Seven-Eleven Japan convenience store chain, people with knowledge of the matter said on Thursday, matching a recommendation from activist investor Daniel Loeb.
The decision is a rarity in Japan where corporate boards traditionally endorse management, which is especially the case at Seven & i where 83-year-old chief executive Toshifumi Suzuki has held sway for decades.
Seven & i's 15-member board voted to retain Seven-Eleven Japan president Ryuichi Isaka, said the people, who were not authorised to discuss the matter publicly and so declined to be identified. The breakdown of the vote was not immediately known.
Daniel Loeb, CEO of investment advisor Third Point, had urged the retailer to retain Isaka, saying in an open letter almost two weeks ago that "rumours" of Isaka's planned removal were of "significant concern."
Loeb, who had previously campaigned for change at companies such as Sony Corp and Fanuc Corp, said Isaka had been "instrumental to the success of Seven-Eleven Japan."
The chain has regularly accounted for nearly 70% of profit of the sprawling retail conglomerate.
It was not immediately known why Suzuki's management proposed replacing Isaka, nor whether management had proposed an alternative.
A Seven & i spokesman confirmed the board had voted down "personnel matters" but declined to elaborate.
Loeb's company Third Point, which owns an undisclosed amount of Seven & i, did not immediately respond to a request for comment.
Shares in Seven & i lost as much as 8.6% in morning trade, but pared some losses after news of the vote. In late afternoon trade, the stock was down 5.5%, versus a 0.1% rise in the benchmark index.
In the same letter, Loeb also raised concerns about "rumours" that Suzuki was grooming his son, Seven & i's chief information officer Yasuhiro Suzuki, as his eventual successor.
The elder Suzuki is a legendary figure in Japan's retail industry. He brought the 7-Eleven franchise to the country in the 1970s, and later took over the US company that conceived the convenience store chain.
The board's latest decision comes as a growing number of Japanese companies appoint outside directors and give them greater roles to improve corporate governance.
Seven & i last month said it had set up a nomination and compensation committee headed by an outside director.
Seven & i is scheduled to announce its full-year earnings later on Thursday, followed by press briefings - one of which will be attended by Suzuki in a rare public appearance. - Reuters
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