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Hyundai shareholders keep chief

LG Electronics also votes to fill key slots in leadership ranks
Mar 18,2017
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General shareholder meetings of local companies, including the nation’s top automaker Hyundai Motor and home appliances manufacturer LG Electronics, were held en masse on Friday. A total of 178 companies met in their respective headquarters.

One of the hot potatoes of the shareholders meetings for Hyundai Motor and affiliate Hyundai Mobis, an auto parts maker, was the re-election of the Chung family members as in-house directors of the companies.

Chung Mong-koo, chairman of Hyundai Motor Group, whose term as a board member ended this year, was looking to renew his tenure but some proxy firms in Korea spoke against it, citing his past record of embezzlement as well as his alleged involvement in the Choi scandal that eventually led to the ousting of former President Park Geun-hye.

Still, during the 49th shareholders meeting at the company headquarters in Yangjae, southern Seoul, shareholders who participated in the meeting all voted for the extension of Chung’s tenure, re-electing the chairman as one of the nine directors of the company. Chung will serve as in-house director for the next three years.

“Chung has contributed to the growth of Hyundai Motor despite the odds and competition against the company,” said one of the shareholders at the meeting. “And I believe he will continue to do so.”

Along with Chung, Choi Eun-soo, former chief justice of Daejeon High Court, has been appointed as a new outside director and auditor. The compensation for the directors of the company was capped at 15 billion won ($13.3 million) during the meeting as well, the same level as the previous year.

The much anticipated decision by the National Pension Service, the second largest shareholder of Hyundai Motor, is to be announced within two weeks, although local media speculated that it either held a neutral stance on or voted against Chung’s re-election this time around.

The state pension fund voted against Chung’s re-election 2008 and 2011 after Chung was convicted of embezzlement and breach of duty charges in 2007.

Also during the meeting, Lee Won-hee, the president and CEO of Hyundai Motor, said the company will meet the goal it set at the outset of the year to produce and sell 5.08 million vehicles around the world in 2017 through a series of strategic plans, such as advancing the Genesis brand into the high-end vehicle market in Europe and expanding investment to develop information and communication technologies for automobiles.

The chairman’s son Chung Eui-sun, vice chairman of the group, was re-elected as the in-house director of Hyundai Mobis, a position he has held since 2002.

On the same day, LG Electronics held its own shareholders meeting at LG Twin Tower in Yeouido, western Seoul, during which shareholders voted to step up the power of CEO Jo Seong-jin, who was appointed as the lone chief executive of the company in December, while downsizing the board of directors from nine to seven members.

Before December, each division of the company, such as home electronics and home appliances, had their own chiefs with full authority over their divisions.

However, the company decided to appoint Jo, then head of home appliance and air systems, the sole CEO of the company, a move to strengthen the governance system of the company, according to a company source.

In an effort to boost Jo’s control over the company, the number of directors of the company was scaled down. “Cho Juno, chief of the mobile communications division, will focus on our smartphone business [after stepping down as a director],” said an LG spokesperson.

LG Electronics’ smartphone division has been struggling to stay afloat, posting losses since the latter half of 2015. However, the company projects that things might be turning around for the troubled division thanks to its latest flagship phone G6.

LG Group Vice Chairman Koo Bon-joon, younger brother of Chairman Koo Bon-moo, was appointed during the meeting as the head of the board of directors of LG Electronics.


BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]