Nintendo – 84th Annual General Meeting of Shareholders: approval ratings, CSR report, message from the President, Q&A

4 July 2024 Lite_Agent General Meeting of Shareholders

On June 27th, Nintendo held its 84th Annual General Meeting of Shareholders. It took place at 10AM JST at the Kyoto International Exhibition Hall “Miyako Messe” (Exhibition Hall 3, Floor 3), instead of Nintendo’s headquarters.

Shareholders were invited to vote on several matters:

the distribution of surplus
the Election of Eight Directors (excluding Directors Who Are Audit and Supervisory Committee Members)
the Election of Five Directors Who Are Audit and Supervisory Committee Members
the Revision of the Amount of Compensation Payable to Directors (excluding Directors Who Are Audit and Supervisory Committee Members)

Proposal 1: distribution of surplus

The company proposed a dividend of 131 Yen per share of common stock, for a total of 152,515,242,190 Yen (up from 123 Yen per share the previous year).

Results of the vote: the proposal was approved by shareholders. 9,629,775 votes in favour (99.38%), 5,612 votes again, and 5,990 abstentions.

Proposal 2 Election of Eight Directors (excluding Directors who are Audit and Supervisory Committee Members)

The company proposed that the following Directors be elected or re-elected:

Shuntaro Furukawa (re-election)
Shigeru Miyamoto (re-election)
Shinya Takahashi (re-election)
Satoru Shibata (re-election)
Ko Shiota (re-election)
Yusuke Beppu (election)
Chris Melandri (re-election)
Miyoko Demay (election)

About Yusuke Beppu: he used to be the president of Wii no Ma, which later became Nintendo Network Services, and he currently serves as a Director of Nintendo Systems. Here’s his past experience in the company:

May 2001: Joined the Company
March 2009: President of Wii no MA Co., Ltd. (company name changed to Nintendo Network Services Inc. in October 2012)
September 2015: General Manager, Business Development Division
June 2019 Executive Officer Senior General Manager, Business Development Division
July 2022: Senior Director, Corporate Planning Department (to present)
June 2023 Senior Executive Officer (to present)

As for Miyoko Demay, she’s a senior executive at the Japanese division of Tiffany & Co.

Results of the vote: all Directors were elected/re-elected as initially proposed. The Approval rate for each Director is as follows:

Shuntaro Furukawa: 8,911,854 votes in favour (91.97%), 682,254 votes against, 47,356 abstentions
Shigeru Miyamoto: 9,218,290 votes in favour (95.13%), 386,543 votes against, 36,637 abstentions
Shinya Takahashi: 9,320,343 votes in favour (96.19%), 284,492 votes against, 36,637 abstentions
Satoru Shibata: 9,320,431 votes in favour (96.19%), 284,404 votes against, 36,637 abstentions
Ko Shiota: 9,320,420 votes in favour (96.19%), 284,415 votes against, 36,637 abstentions
Yusuke Beppu: 9,260,021 votes in favour (95.56%), 344,814 votes against, 36,637 abstentions
Chris Melandri: 9,153,805 votes in favour (94.47%), 479,191 votes against, 8,470 abstentions
Miyoko Demay: 9,587,014 votes in favour (98.94%), 45,991 votes against, 8,470 abstentions

As comparison, their approval ratings last year were as follows:

Shuntaro Furukawa: 8,054,806 votes in favour (83.77%), 1,475,355 votes against, 25,513 did not vote
Shigeru Miyamoto: 8,863,113 votes in favour (92.17%), 661,274 votes against, 31,297 did not vote
Shinya Takahashi: 9,185,892 votes in favour (95.53%), 338,495 votes against, 31,297 did not vote
Satoru Shibata: 9,185,948 votes in favour (95.53%), 338,439 votes against, 31,297 did not vote
Ko Shiota: 9,185,887 votes in favour (95.53%), 338,500 votes against, 31,297 did not vote
Chris Meledandri: 9,084,658 votes in favour (94.48%), 471,018 votes against, 5 did not vote

Proposal 3: Election of Five Directors Who Are Audit and Supervisory Committee Members

The company proposed that the following Directors be elected or re-elected:

Takuya Yoshimura (re-election)
Katsuhiro Umeyama (re-election)
Asa Shinkawa (re-election)
Eiko Osawa (election)
Keiko Akashi (election)

Results of the vote: all Directors were elected/re-elected as initially proposed. The approval rate for each Director is as follows:

Takuya Yoshimura: 8,797,438 votes in favour (90.79%), 805,694 votes against, 38,307 abstentions
Katsuhiro Umeyama: 7,140,829 votes in favour (73.69%), 2,492,148 votes against, 8,470 abstentions
Asa Shinkawa: 9,562,563 votes in favour (98.69%), 70,424 votes against, 8,470 abstentions
Eiko Osawa: 9,587,298 votes in favour (98.94%), 45,689 votes against, 8,470 abstentions
Keiko Akashi: 9,586,447 votes in favour (98.93%), 46,540 votes against, 8,470 abstentions

Proposal 4: Revision of the Amount of Compensation Payable to Directors (excluding Directors Who Are Audit and Supervisory Committee Members)

Due to the increase in the number of Directors (from 6 to 8), and to “facilitate a flexible response to changes in the business environment”, the company proposed to change the amount of money paid to Directors.

Here’s a summary of the changes proposed (more details can be found in the convocation notice):

Of the current forms of monetary compensation, a compensation limit has been approved by the General Meeting of Shareholders for fixed compensation only. The Company will establish a compensation limit of 1,800 million yen per year, including both fixed compensation and performance-based variable compensation.

Note that if calculated based on the limit for variable compensation established by the resolution of the Board of Directors, the current limit for monetary compensation would be 1,500 million yen per year.

The limit for fixed compensation will remain unchanged at 500 million yen per year. However, the limit for fixed compensation for Outside Directors will be revised from 50 million yen per year to 100 million yen per year.

The specific method used to calculate performance-based variable compensation (including additional compensation paid when conditions are met) will be decided by the Board of Directors based on the policy for determining the details of compensation to individual Directors, presented at the end of this proposal.

Results of the vote: this proposal was approved by shareholders. 9,603,381 votes in favour (99.11%), 32,042 votes against, 6,035 abstentions.

Next, Nintendo will update their CSR Report: you will find it on these pages:

The new message from the president (Shuntaro Furukawa) will also be shared. Here’s the one from last year:

With our CSR goal of “putting smiles on the faces of everyone Nintendo touches,” we constantly examine the best ways for Nintendo to fulfill its social responsibilities through group-wide collaboration.

In consideration of the social conditions surrounding Nintendo, we set four CSR priority areas: “consumers,” “supply chain,” “employees” and “environment.” We continue to conduct our CSR activities based on this framework.

Our four priority areas encompass initiatives that include improving product quality and ensuring product safety, creating an environment where children can play with peace of mind, promoting CSR procurement through communication with our suppliers, building a work environment that fully enables our employees’ various capabilities and reducing the environmental impact of our products and business activities.

These initiatives are in line with Nintendo’s business goal of providing entertainment that anyone can enjoy regardless of age, gender, past experience and other diverse social backgrounds. We will faithfully continue our efforts, while appropriately disclosing the status of our CSR activities, being mindful of our four priority areas.

While cherishing the Nintendo DNA of originality, flexibility and sincerity that we have long fostered, we are committed to accomplishing our CSR goals alongside our aim to be a company that creates smiles for everyone through entertainment.

Finally, there’s the usual Q&A session with investors. You can find the official English translation of the full transcript on this page!

Here’s the list of questions:

Question 1: I believe there are people with visual impairments out there who would like to play games. Please describe any initiatives Nintendo is undertaking for these people.

Question 2: I would like to know about countermeasures against the reselling of the successor to Nintendo Switch. At last year’s general shareholders meeting, you said you would prevent resale by ensuring the production of a sufficient volume of hardware. How are these efforts coming?

Question 3: Nintendo has shined the spotlight on indie games [games developed by smaller companies] from time to time. Going forward, what will Nintendo’s relationship be like with these types of games? Are you considering any proactive measures to increase the number of indie titles?

Question 4: Efforts are underway to equip smartphones with AI, and it is expected that AI will become more prominent in everyday life. I’d like to hear about Nintendo’s initiatives using AI.

Question 5: A special website celebrating the 40th anniversary of the Family Computer system (Famicom) has been up since last year. Also, you announced a game called Nintendo World Championships: NES Edition. Are you planning other projects related to Famicom [NES]?

Question 6: Regarding upcoming software releases, there is a rich lineup of titles from the Mario and The Legend of Zelda series, but some users are voicing the opinion that there is a lack of new IP. What are your thoughts on developing titles using new IP?

Question 7: It was announced that the hardware sales forecast for the current fiscal year does not include the successor to Nintendo Switch. However, I believe the full-year earnings forecast will be greatly affected by a successor system or a major software release. I would like to hear your thoughts on the need to announce the company’s full-year earnings forecasts.

Question 8: The breadth of Nintendo’s business is widening with moves like the opening of SUPER NINTENDO WORLD inside Universal Studios Hollywood. I’d like to hear about the kinds of directions Nintendo will take going forward. I would also like to ask about your collaboration with NVIDIA for Nintendo Switch.

Question 9: Regarding your production system going forward, are you considering measures to deal with the weak yen and hedge risk, such as by strengthening manufacturing within Japan or increasing the number of countries with production bases?

Question 10: I’d like to know what investments you are making or considering in information security. Given the widely reported news of cyberattacks against other companies, the importance of information security for business has increased in recent years. I realize that Nintendo has had few product information leaks and almost no incidents related to information security, but how do you verify that your information security is working properly?

Question 11: Super Mario Bros. Wonder, released last year, was the first new 2D Mario game in 11 years. It seems that software development for Nintendo Switch is taking longer than in the past. In terms of the gaming experience, I think it is important for players to have a series of memorable experiences at a young age. So, it would be nice to see shorter development cycles and games released regularly, even if they are not major game titles, so young people have more opportunities to play games.

Question 12: I would like to know what your thoughts are on shareholder returns. Nintendo enacted a 10-for- 1 stock split in 2022. Are there plans in your shareholder return policy to conduct another stock split or a share buyback going forward?

Question 13: Nintendo owns a lot of compelling IP, such as Mario and The Legend of Zelda, but there are cases where other companies are offering products and services that appear to infringe on those IP rights. I am concerned about a possible erosion of the value of Nintendo’s IP. What are your thoughts on how to respond to acts that infringe on Nintendo’s intellectual property rights?

Question 14: I can imagine that the core developers at Nintendo are getting older. Are you considering handing over or transitioning future game production to the younger generation?

Question 15: I understand that Nintendo sees itself as a company that aims to “put smiles on the faces of everyone it touches.” Unfortunately, I sometimes come across cases on social media where Nintendo IP and games are used inappropriately. I feel that this kind of behavior poses the risk of damaging the value of Nintendo IP, so I’d like to know how you handle such cases.

Question 16: I would like to know how the weakening of the yen is affecting product prices. If you consider the current market exchange rate, there is a large difference between the sales price for Nintendo Switch – OLED Model in Japan and the U.S. I am concerned that if the yen continues to depreciate at the time the successor system is launched, setting the price in each region based on the market exchange rate would make it less affordable for people in Japan. Have you considered adjusting the sale prices for specific regions?

Question 17: I feel that the candidates for board positions to be elected in today’s general meeting of shareholders do not hold very much Nintendo stock. What is your stance on the amount of stock owned by board members?

Question 18: I believe that good game music is a catalyst for people to play games. Recently, there have been more soundtracks released for games, such as for The Legend of Zelda series. Are you considering utilizing Nintendo’s assets by for example, distributing game music via a subscription system?

Source: Nintendo / Nintendo / Nintendo