Toshiba’s Chief Executive Satoshi Tsunakawa is stepping down as the embattled Japanese technology giant seeks to restructure and restore its reputation.

Tsunakawa will be replaced by Taro Shimada, an executive officer and corporate senior vice president, under a decision made at a Toshiba board meeting Tuesday, the Tokyo-based company said.

Shimada was an executive at Siemens, both in Japan and the United States, before joining Toshiba Corp. in 2018, working in its digital operations.

He faces the challenge of leading a restructuring plan that’s drawn criticism from shareholders. In February, Toshiba said it plans to split into two companies, one focused on infrastructure and the other on devices.

Shimada said he takes pride in being the first CEO with a background in digital technology and hopes that will be a plus for Toshiba's energy business.

"I have been at Toshiba for only three years, but I love Toshiba," he said.

When asked about how he hoped to win over critical shareholders, Shimada said he had learned while working in the U.S. about the importance of communicating as equals, referring to the expression "put yourself in someone else's shoes."

The restructuring proposal is still subject to shareholder and regulatory approval. An extraordinary shareholders’ meeting is set for March 24, when the plan will be put to a vote. Toshiba officials told reporters the management change was timed to happen before that, although it was unclear how that might help win over shareholders.

Toshiba scrapped its earlier proposal for a three-way split, which was not popular with shareholders, including foreign funds.

Approval for Tuesday’s personnel changes, including a resignation of another board member, and the nomination of two others, will be sought in a shareholders’ meeting in June, Toshiba said.

Toshiba was one of Japan’s most revered brands but has been struggling since the Fukushima nuclear disaster in March 2011. A tsunami sent three reactors into meltdowns, spewing radiation over an area that’s still partly a no-go zone. Toshiba is involved in the decommissioning effort, which will take decades.

Initial plans announced last year by the scandal-ridden conglomerate to split into three had been much criticized by foreign hedge fund shareholders – many of which favor a sale to a private equity firm. But a revised plan last month that called for a breakup into two companies and the sale of other businesses also met with internal dissent, according to two sources familiar with the matter.

There were fears within Toshiba that its planned sale of units such as its elevator business would leave the company only with low-margin businesses, said the sources who were not authorized to speak to media and declined to be identified.

Asked about internal opposition, Toshiba said it firmly believes its announced reorganization plan is the best option for the company but declined to comment further.

For some observers, the departure of Tsunakawa as well as that of Mamoru Hatazawa, a board member who had pushed to split up the company, add to doubts about whether Toshiba will be able to press ahead with the plans to break up.

"The split plan will be reviewed – we think there is a chance it is scrapped," said Justin Tang, head of Asian research at investment advisor United First Partners in Singapore.

The company’s reputation was also tarnished by an accounting scandal, which involved books being doctored for years.

In 2021, Nobuaki Kurumatani resigned as Toshiba president and Tsunakwa took the helm. Kurumatani had headed global fund CVC Capital Partners' Japan operations and became CEO in 2018.

Tsunakawa said he had accomplished his mission of handing over the leadership to the next generation and hoped Toshiba's shareholders, customers and employees would agree with the proposed restructuring plan. He did not say how the company had dealt with dissent.

"I am confident I was able to hand over the leadership toward Toshiba's evolution into the future," he told reporters in an online news conference.

He defended the decision to appoint Toshiba people, not outsiders, to top positions, stressing that the company needs to change from within. This may be Toshiba's "last chance" to fix its reputation and brand power as a technology company and win back trust, he said.

The original break-up plan was announced last November after a five-month strategic review following years of accounting scandals and governance issues that undermined investor confidence and saw Toshiba's market value more than halve, to around $18 billion, from an early 2000s peak.

Founded in 1875, Toshiba was a manufacturing pioneer for everything from electric rice cookers to laptop computers. It also invented flash memory, although that division was sold off as its fortunes tumbled.