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.