Activist flushes out Nomura and investor weakness
By Antony Currie
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Is there a better way to shame an investment bank than pointing to deficiencies in bathroom etiquette? That’s what an anonymous Nomura investor has done in one of 18 proposals he or she has got on the docket for a vote at the Japanese investment bank’s annual meeting of shareholders later this month. Installing Japanese-style toilets for employees to straddle to “strengthen their lower body” is just one of several peculiar proposals scattered in among more mainstream ones. There’s more to the unnamed investor’s submissions, though, than meets the eye.
Granted, the oddities make for an excellently entertaining read. Equating the physical benefits of quality time in the bathroom with avoiding bankruptcy and getting the stock price to at least quadruple is both sublime and utterly ridiculous. And who cannot but chuckle at the suggestion the bank stops giving “three banzai cheers” at the annual meeting because “the venue is small and there are many shareholders with strong armpit odor?” It is also hard to argue that ineffective directors should be stripped of that title if they don’t actually direct – though the suggestion they instead be called “crystal roles” must have lost something in translation. Meanwhile, the calculation that shortening the name of the bank would save “1000 man-days per year” is the kind of elusive statistic that any Wall Streeter would be proud of.
But some of more serious proposals are actually pretty smart. It makes sense to link pay with performance, for example, and to prevent shareholders being diluted by mandating that capital be raised through rights offerings rather than common stock deals.
Even so, the most astounding aspect of this odd little piece of shareholder activism is not the nature of the proposals. It’s that this is the first time in at least six years that any Nomura shareholder has successfully submitted anything to be voted on at the annual meeting – despite poor earnings, a stock price 90 percent lower than in 2007 and the controversial acquisition of Lehman Brothers’ operations in Europe and Asia.
Whether you find them funny or infuriating, or right or wrong, Nomura’s anonymous gadfly deserves some hearty congratulations for getting this far. But don’t raise your arms too high in the air as you express appreciation – just in case.