The idea of an octogenarian CEO in questionable health ousting a potential successor to make way for his own son would be met by hackles, maybe even outright laughter, by many corporate governance experts and shareholder activists in the U.S. and Europe.
Yet that’s what Dan Loeb accused Seven & i Holdings Co. Chief Executive Officer Toshifumi Suzuki of having in mind for Japan’s biggest retailer, which operates the Seven-Eleven, Denny’s and Ito-Yokado retail brands. Suzuki, 83, might have succeeded were it not for a shaming campaign by Loeb, the billionaire activist investor and founder of hedge fund Third Point LLC.
On Thursday, the Seven & i board rejected a plan to remove Seven-Eleven Japan President Ryuichi Isaka, the executive Loeb praised as “instrumental to the success” of the profitable convenience stores unit in a sharply critical letter to the company’s board sent March 27.
In addition, he raised concerns for Suzuki’s “chronic health problems” and claimed the CEO planned to name an interim president of the core convenience store unit — to be followed later by the promotion of his son, Yasuhiro Suzuki. “If these rumors are true,” Loeb wrote, “they raise serious questions about Mr. Toshifumi Suzuki’s competence and judgment and whether he should be making any decisions about the company.”
The board’s rejection — reached after directors came one vote short of removing Isaka — was a stunning victory for Loeb and prompted Toshifumi Suzuki’s resignation hours later.