"This Year's CEO Management Performance" SK Chairman Chey Tae-won's Special Mission to Boost SK Stock Price

SKT ICT Alliance Subsidiaries
Stock Prices Stagnate, Triggering Emergency
Joining Forces with Global Companies
Making Every Effort to Enhance Corporate Value

[Asia Economy Reporter Lim Hye-seon] "I will judge all management performance based on the stock prices of the affiliated companies in charge."

Choi Tae-won, Chairman of SK Group, has given a special order to the CEOs of affiliated companies to "boost stock prices." The CEO evaluation criteria will now be most heavily influenced by the rise or fall of the stock prices of their respective affiliated companies. With plans for over 1 trillion won in global investments and Chairman Choi personally supporting the SK ICT Alliance, the sluggish stock prices of SK Square, SK Hynix, SK Telecom, and others have raised alarms.

Half of Management Evaluation Based on Stock Prices

According to the telecommunications and securities industries on the 9th, SK Group has increased the weight of stock prices in this year's executive management evaluation (KPI) from the previous 30% to at least 50%. SK Group has reflected stock price boosting in the executive KPI since 2017. Chairman Choi has continuously emphasized the importance of boosting stock prices. Last year, SK promised through its financial story to grow its market capitalization to 140 trillion won by 2025, but as of the morning of the 9th, the market capitalization is less than 20 trillion won.

Chairman Choi also highlighted the importance of 'stock prices' in a recent lecture at Seoul National University, stating, "The value of a company can only be formed when the company presents a convincing story and shareholders or investors trust the will and capability to pursue it."

Due to US interest rate hikes and the aftermath of the Ukraine war, the current report card is at a dismal level. Especially, the ICT affiliates' performance is poor. SK Square's

stock price fell 27.2% from 66,500 won to 48,400 won. SK Hynix also dropped 16.3% from 128,500 won to 107,500 won. SK Innovation (-18.3%), SK Chemicals (-15.4%), SK Discovery (-11.5%), SK D&D (-10.8%), SK Networks (-3.8%) are also struggling. The stocks that rose the most are SK and SK Telecom, but their year-to-date returns are only 1.0%, essentially stagnant.

Enhancing Value by Partnering with Global Partners

Executives of SK Group's listed affiliates are putting all their efforts into 'enhancing corporate value.' Executives strongly appeal at investor relations (IR) meetings that "the stock prices are discounted and not receiving their true value." In the case of SK Square, they disclosed the discount rate compared to net asset value (NAV) along with the year-end stock price on their website. SK Square explains that its stock price is discounted by 63.9%.

The SK ICT Alliance is focusing on laying the groundwork for growth in the global market. SK Square, SK Telecom, and other SK ICT Alliance members have begun full-scale entry into Europe. SK Square and SK Telecom are partnering with Germany's leading telecom operator Deutsche Telekom to launch the app market One Store and the metaverse platform Ifland in Europe. They also plan to establish a joint venture that will serve as a forward base for metaverse business in the European region in the long term. SK Square's subsidiary SK Shieldus and Deutsche Telekom's security business subsidiary Deutsche Telekom Security have signed a letter of intent (LOI) to build a strategic partnership. The AI-based video analysis technology 'Vision AI' and video security technology and monitoring solutions jointly developed by SKT and SK Shieldus will also be commercialized with Deutsche Telekom in Europe. Previously, the US branch of AI semiconductor company 'SAPEON' was also established.