Yellow Hat (TYO:9882) opposed shareholder proposals from Strategic Capital and Japan-Up that called for changes to its dividend policy and director compensation structure, according to a Friday filing on the Tokyo Stock Exchange.
The proposals, submitted ahead of the company's annual shareholder meeting in June, sought to shift authority over year-end dividend decisions from the board to shareholders and introduce a 100% dividend payout ratio policy.
The shareholders also proposed revising restricted stock compensation for directors by linking allocations to the company's price-to-book ratio relative to the Tokyo Stock Exchange Prime Market average.
Yellow Hat said its current policy of combining dividends and share repurchases allows more flexible capital allocation while supporting long-term shareholder returns and growth investments. The company's medium-term plan targets a total shareholder return ratio of 100%, comprising a 45% dividend payout ratio and 55% share repurchases.
The company also said its existing executive compensation framework already aligns management interests with shareholder value through a mix of fixed pay, variable compensation, and restricted stock awards overseen by an independent committee.
The company said it has raised dividends for 16 consecutive years and argued that a rigid policy allocating all earnings to dividends could limit growth investments and reduce financial flexibility.