UK Fund Seeks Removal of Two Executives at Japan’s Wacom

f6rh)v3aqigq9t4d)xlc)etn_media_dl_1.png Bloomberg

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(Bloomberg) — A UK investment fund is urging shareholders of pen tablet maker Wacom Co. to remove two top executives over the Japanese company’s weak performance and unsuccessful management moves.

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In its shareholder proposals, Asset Value Investors Ltd. said that management actions have weakened the company’s business operations and share price, and said there was “improper use of corporate resources.”

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AVI, which is Wacom’s biggest shareholder with a 13.8% stake, is calling on President Nobutaka Ide and Chief Operating Officer Takafumi Nakajima to leave the board, and recommended a candidate for an independent director. That’s the second year in a row that the London-based firm submitted proposals to Wacom management. All five of its proposals last year were voted down.

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Wacom said in a statement in response to AVI that the proposals contain “factual errors and speculation” and management is opposed to them.

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Proposals by activists in Japan will be closely watched by investors to see if the challenges to management will be accepted by shareholders. Institutional investors and activists have already submitted proposals to 33 companies this year more than a month before the peak of general shareholder meetings in late-June, approaching the all-time high 51 companies last year, according to Bloomberg and Sumitomo Mitsui Trust Bank Ltd. data.

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Wacom’s brand business, which includes pen tablets, returned to an operating profit in the fiscal year ended March 31 after losing money for three straight years as competition from inexpensive overseas products intensified. 

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The company reduced workforce by about 15% to 20% in the year to March 2025. Despite restructuring steps like those, Wacom’s share price is low because of Ide’s mismanagement of the company, AVI said. The fair value of the stock is ¥1,300, the UK firm said. That’s a level it only breached one year in 2013 — the share gained 1.2% to ¥755 on Friday, on a day when the broader Tokyo market fell slightly. 

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AVI cited as an example of improper use of corporate resources the establishment by Ide of a nonprofit organization in 2021 to support artists and designers. Wacom donated ¥280 million ($1.8 million) to the organization, and Ide’s daughter has often appeared in and directed annual events co-hosted with Wacom, AVI said.

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Wacom’s COO Nakajima also leads RE-X Expansion Inc., an IT system construction and environmental energy consulting firm. Wacom’s purchase of the company for ¥1.7 billion in March 2026 was “irrational,” considering that the firm had few synergies with Wacom’s core business and it had operating losses for two straight years, AVI said.

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Wacom countered in its statement that there’s nothing inappropriate about the nonprofit organization in view of the fact that a majority of its board of directors aren’t Wacom executives or employees, and that care is taken to ensure that Ide’s family don’t receive excessive profits when they take part in the organization’s events.

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The Japanese company also said its acquisition of RE-X Expansion was reasonable and justified as it would contribute to increasing corporate value.

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(Updates with closing share price in seventh paragraph.)

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