According to South Korean media Koreatimes on March 1st, shareholders of KT&G are expected to vote later this month on the appointment of a new CEO candidate. The largest shareholder is opposed to the appointment, claiming that the candidate should be held responsible for the company's stagnant performance in recent years.
On February 22nd, the company appointed Senior Executive Vice President Bang Kyung-man as the final candidate for the position of Chief Executive Officer.
However, KT&G's largest shareholder, Industrial Bank of Korea (IBK), has decided to vote against Fang Jingman's appointment at the shareholders' meeting scheduled for March 28. In addition, the activist hedge fund Flashlight Capital Partners (FCP) has raised questions about the nomination process, creating uncertainty about whether Bang will be appointed as CEO at the meeting.
IBK, which holds a 6.93% stake in KT&G, recently stated that there are issues with the process of selecting nominees. An executive at IBK added that since the nominee for CEO was appointed as a senior executive vice president, the company's operating profit has decreased by over 20%.
The National Pension Service (NPS), which owns a 6.31% stake, is also expected to decide on the appointment of the CEO candidate at the shareholders' meeting on March 28.
In response to opposition regarding the appointment of the CEO candidate, KT&G stated that the selection process for the new CEO was conducted fairly, including the first time in 20 years that a candidate was chosen from outside the company. The CEO nominee also meets the criteria set by the company for the new chief executive officer.
The entire CEO appointment process has been conducted and guided by an independent external board committee. In addition, public recruitment is considered as one of the channels to form a pool of CEO candidates, providing a fair assessment opportunity for both internal and external candidates. Without the establishment of an advisory group composed of external experts, the fairness and objectivity of the appointment process have been ensured through the committee's impartial and objective viewpoints being taken into account.
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