RMB Opposes Shareholder Proposals at Sanyo Shokai Regarding Restricted Stocks and Dividend Increase
CHICAGO--(BUSINESS WIRE)--Mar 18, 2019--RMB Capital (“RMB”), a Chicago-based investment firm, opposes shareholder proposals that were filed upon the 76 th annual shareholders’ meeting at Sanyo Shokai (8011 JP) in March while supporting management’s proposals. RMB owns more than 5% of the total outstanding shares of Sanyo Shokai as filed in September 2018.
1. Opposing Proposal 8: Restricted stocks
While RMB supports the introduction of the stock compensation program for Sanyo Shokai’s executives, RMB opposes Proposal 8 because it duplicates Proposal 4, which was submitted by the management. Further, RMB believes the proposed restricted period of up to 20 years is too long and fears that such a long restriction period may result in a disincentive for the management.
2. Opposing Proposal 9: Dividend increase
RMB opposes the proposed increase of dividends. We believe it is premature for Sanyo Shokai to increase the dividends at this point, though we recognize the company has a large amount of cash on its balance sheet. We assert Sanyo Shokai is still in a turn-around phase and needs to limit actions that would drain it of cash. Further, RMB believes it is wrong to only reward shareholders while having laid off as much as a quarter of its workforce, many of whom served Sanyo Shokai for decades. RMB believes shareholders should share the pain of the restructuring of the business and be patient during the tough time Sanyo Shokai and its people face currently. Rather than issuing more dividends, RMB wants Sanyo Shokai’s management to utilize its cash to add to the corporate value in the long term. This includes efforts such as rebuilding its brand portfolio, enhancing its e-commerce platform, and enhancing its sales channels and store network.
RMB supports the management of Sanyo Shokai and its mid-term plan. We believe in not only the capability of the management but the people at Sanyo Shokai, such as highly skilled workers at Shichinohe and other factories, as well as strongly motivated representatives at store fronts of various sales channels. We believe Sanyo Shokai has a strong potential to reestablish itself as a prominent high-fashion player in Japan.
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CONTACT: RMB Capital
KEYWORD: UNITED STATES ASIA PACIFIC NORTH AMERICA ILLINOIS JAPAN
INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE
SOURCE: RMB Capital
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PUB: 03/18/2019 06:17 PM/DISC: 03/18/2019 06:17 PM