Korean Air's Cho Yang-ho rejected extended term as director of the board
- 5 years ago
조양호 회장, 국민연금 주주권 행사로 경영권 박탈… 재벌 총수로 '최초'
CEO of South Korea's flag carrier, Korean Air, was voted down as director of the board in a landmark shareholder vote.
It marks the first such move among Korea's familiy-controlled conglomerates.
Our Choi Si-young reports. 27 years since he first took over the board in 1992, Korean Air CEO Cho Yang-ho's reappointment as director of the board was rejected by shareholders.
A total of sixty-four percent of shareholders present at the meeting voted in support of his reelection, falling just short of the "two-thirds" required for approval under the firm's bylaws.
But the result was no surprise, as the National Pension Service,... the airline's second largest stakeholder,... declared a day earlier that it would not vote in favor of the motion to re-elect Cho as director.
The institutional investor said Cho had behaved in ways that damaged corporate values.
Cho is on trial facing charges of embezzlement and tax evasion.
South Korean civic groups and proxy adviser Institutional Shareholder Services concurred, recommending investors to vote against the reappointment of Cho, citing “sufficient evidence of egregious governance concerns."
Experts point that the pension service rightfully exercised its shareholder's rights to suspend a director unfit to lead the board, but others differ,... saying his contributions to the firm so far should be considered when deciding to kick out the long-serving executive.
But, both of them agree that the pension service is now being a more vocal shareholder.
"The NPS is a major stakeholder at big-name companies like Samsung Electronics and Hyundai Motor,... so it can vote on contentious issues at the shareholder meetings.
From now on, the NPS will more actively exercise its voting rights and wield more influence over those companies."
"Cho is the first family member,... of the families that started the Korean conglomerates known as chaebols,... to be dragged off a board of directors.
Now that the NPS has more of a say in how they run their businesses, the chaebols will be under greater scrutiny."
Choi Si-young, Arirang News."
CEO of South Korea's flag carrier, Korean Air, was voted down as director of the board in a landmark shareholder vote.
It marks the first such move among Korea's familiy-controlled conglomerates.
Our Choi Si-young reports. 27 years since he first took over the board in 1992, Korean Air CEO Cho Yang-ho's reappointment as director of the board was rejected by shareholders.
A total of sixty-four percent of shareholders present at the meeting voted in support of his reelection, falling just short of the "two-thirds" required for approval under the firm's bylaws.
But the result was no surprise, as the National Pension Service,... the airline's second largest stakeholder,... declared a day earlier that it would not vote in favor of the motion to re-elect Cho as director.
The institutional investor said Cho had behaved in ways that damaged corporate values.
Cho is on trial facing charges of embezzlement and tax evasion.
South Korean civic groups and proxy adviser Institutional Shareholder Services concurred, recommending investors to vote against the reappointment of Cho, citing “sufficient evidence of egregious governance concerns."
Experts point that the pension service rightfully exercised its shareholder's rights to suspend a director unfit to lead the board, but others differ,... saying his contributions to the firm so far should be considered when deciding to kick out the long-serving executive.
But, both of them agree that the pension service is now being a more vocal shareholder.
"The NPS is a major stakeholder at big-name companies like Samsung Electronics and Hyundai Motor,... so it can vote on contentious issues at the shareholder meetings.
From now on, the NPS will more actively exercise its voting rights and wield more influence over those companies."
"Cho is the first family member,... of the families that started the Korean conglomerates known as chaebols,... to be dragged off a board of directors.
Now that the NPS has more of a say in how they run their businesses, the chaebols will be under greater scrutiny."
Choi Si-young, Arirang News."