"Is Serving 5 Terms a Big Deal? Going for a 6th Term Anyway"…The Secret to Longevity of Pharmaceutical CEOs

Sung Seok-je, CEO of Jeil Pharmaceutical, Approaches Second Six-Term Reappointment
Lee Geum-gi, Honorary Chairman of Ildong Pharmaceutical, Sets Longest Record with Nine Terms
Long-Term Management Needed for New Drug Development... Many Executives Also Former Researchers

[Asia Economy Reporter Cho Hyun-ui] This year, a CEO in the pharmaceutical and bio industry is expected to achieve a sixth consecutive term. The long-term reappointment of CEOs, many of whom have led their companies for over 10 years, stands out significantly compared to the average tenure of CEOs in Korea’s top 30 groups, which is only 3.3 years. This reflects the industry's characteristic that requires consistent management strategies due to the very long drug development period.

◆Second Current CEO to Achieve Sixth Consecutive Term = According to the industry on the 10th, Seong Seok-je, CEO of Jeil Pharmaceutical, is set to be reappointed for the sixth time at the shareholders' meeting in June. CEO Seong has been serving as the President and CEO of Jeil Pharmaceutical since 2005. A Jeil Pharmaceutical official said, "Unless something unusual happens, CEO Seong is expected to succeed in his reappointment again this year."

Before CEO Seong, Lee Jeong-chi, Chairman of Ildong Holdings, became the first to achieve a sixth consecutive term in 2018, setting the record for the longest-serving CEO. Including former CEOs, the longest record is held by Lee Geum-gi, Honorary Chairman of Ildong Pharmaceutical, who was appointed CEO nine times over 26 years from 1984. Former Samjin Pharmaceutical Chairman Lee Seong-woo also completed six consecutive terms and stepped down after 18 years last year.

◆Supported by Owners, Led by CEOs = The pharmaceutical industry has many remarkable records related to long-serving CEOs compared to other industries. In 2013, three CEOs succeeded in their fifth consecutive term simultaneously. The reason for the low turnover of CEOs in the pharmaceutical industry is that most major pharmaceutical companies are owner-led with conservative atmospheres. When a CEO with management capabilities runs the company and the owner supports them, the likelihood of good performance increases. An industry insider said, "CEOs who have managed companies for decades often work in close harmony with the owners."

Since long-term management is necessary for new drug development and other reasons, consistent leadership is also important. Pharmaceutical CEOs must possess various qualities, including expertise, to achieve this. A pharmaceutical company official said, "The pharmaceutical industry has a long cycle, with new drug development taking decades. Even after successful development, additional stages such as production follow, so leadership changes can pose risks." Jung Yoon-taek, CEO of the Pharmaceutical Industry Strategy Research Institute, explained, "In the pharmaceutical industry, networking is important not only because of expertise but also due to the regulatory nature of the industry."

◆R&D-Origin CEOs Also in the Spotlight = Recently, not only sales personnel but also researchers have been emerging as CEOs. For example, last year, Cho Jeong-woo, CEO of SK Biopharm, who played a key role in the success of Korea’s first independently developed new drug 'Xcopri,' is a researcher who has worked at the U.S. National Institutes of Health (NIH), Kumho Petrochemical Kumho Life Science Research Institute, and SK Biopharm’s New Drug Business Division. CEO Jung said, "Since the large-scale technology export by Hanmi Pharmaceutical in 2015, many CEOs have been appointed from research directors, development heads, and GMP (Good Manufacturing Practice) backgrounds. Technology-based CEOs are recognized for their global mindset and R&D competitiveness."

Meanwhile, this year, Noh Byung-tae, CEO of Daehwa Pharmaceutical, and Park Seung-guk, CEO of Hanall Biopharma, will challenge their fifth and fourth consecutive terms, respectively. Among listed pharmaceutical companies, the CEO whose term ends first is Kim Young-hak, CEO of Hyundai Pharm. CEOs such as Kim and Yoo Je-man, CEO of Shinpung Pharmaceutical, are expected to appear consecutively as long-serving CEOs, with both seeking a third consecutive term at this year’s regular shareholders' meetings.