Japan Exchange Group chief executive officer Hiromi Yamaji was re-elected with a smaller majority as his approval rating slid to the lowest ever and the bourse operator¡¯s shares underperformed the market benchmark.

The still-overwhelming majority of 82.11% voted in favor of his reappointment at the annual general meeting held last week, according to a filing on Tuesday. Even so, it was lower than last year¡¯s 94.09% and below the 88.88% polled in 2023.

Investors voted with their feet as the stock¡¯s 18.6% decline over the past year underperformed the broad Topix¡¯s 1.6% rise.

U.S. proxy adviser Institutional Shareholder Services urged investors to vote against Yamaji¡¯s re-election after an employee was found guilty of insider trading.

In December, Japan¡¯s securities watchdog filed a complaint to prosecutors against a former Tokyo Stock Exchange employee and his father for an alleged case of insider trading. Yamaji¡¯s salary was cut by 50% for two months in January following that incident.

Tomoichiro Kubota, senior market analyst at Matsui Securities, said that the approval rate for Yamaji ¡°is probably the result of foreign institutional investors following ISS¡¯s recommendation to vote against the company.¡±

He pointed out that even those investors who ostensibly voted against the proposal also viewed the scandal as being caused by just one ordinary employee. ¡°The JPX is not in a critical situation where the approval rating is close to 50%, and I don¡¯t think the company expects to see more votes against him in the future,¡± he said, adding that the impact on management will be limited.

Meanwhile, Glass Lewis, another proxy adviser, recommended voting for Yamaji¡¯s reappointment, after the former Nomura investment banker¡¯s unconventional reforms and globe-trotting sales pitches helped make Japan one of the world¡¯s best performing equity markets last year. The move led to a record number of shareholder proposals as activist investor involvement flourished.