LG Electronics Begins Executive Personnel Changes This Week
Early December Executive Changes at Samsung, SK, and Hyundai Motor
[Asia Economy Reporters Sunmi Park, Kiho Sung, Hyungil Oh] LG Group has completed business report meetings last week to review the management environment and discuss future strategies of major affiliates including LG Electronics, and this week will conduct executive appointments for key affiliate presidents and executives. Starting with LG in mid-next month, personnel announcements from the four major groups including Samsung, SK, and Hyundai Motor are expected to follow in succession.
According to the industry on the 22nd, LG is expected to be the first among the four major groups to announce key affiliate presidents and executive appointments as early as the 24th. With Chairman Koo Kwang-mo’s leadership system firmly established alongside four vice chairmen leading the holding company, battery, chemical, and distribution sectors?Kwon Bong-seok, Kwon Young-soo, Shin Hak-cheol, and Cha Seok-yong?and considering the three highs (high inflation, high interest rates, and high exchange rates) increasing management uncertainties, it is highly likely that the personnel changes will focus on stability rather than major shifts. Last year, LG also conducted personnel appointments emphasizing stability and innovation by mostly retaining CEOs of major affiliates while promoting many young new executives.
LG Electronics, despite declining profitability amid sluggish set business, experienced significant changes last year with Vice Chairman Kwon Bong-seok moving to the holding company and President Cho Joo-wan, who has extensive overseas experience and excellent global business acumen, being promoted. Therefore, replacing the president is not easy. President Cho’s term lasts until March 2025. It is anticipated that this personnel appointment will maintain the existing LG Electronics leadership under President Cho while reorganizing mainly the underperforming business divisions.
The appointments of presidents at LG Innotek and LG Display, whose performances diverged significantly this year, are also noteworthy. LG Innotek, led by President Jung Cheol-dong, achieved record-high performance this year, so he is expected to retain his position with a possibility of promotion to vice chairman. LG Display President Jung Ho-young recorded losses despite efforts to improve the company’s structure amid the worst external environment this year. His term expires in March next year.
Samsung is preparing for its first regular personnel appointments since Lee Jae-yong was promoted to chairman on the 27th of last month. As usual, the appointments of presidents and executives are expected to take place in early December. Attention is focused on whether Samsung Electronics will maintain the two-top system with Vice Chairman Han Jong-hee (head of the DX division) and President Kyung Kye-hyun (head of the DS division), who will be appointed as the successor to the resigned President Lee Jae-seung of the home appliances business division, and whether there will be an organizational restructuring to revive the control tower of Samsung affiliates.
Given the uncertain management environment, even if the president-level appointments are minor, there is a high possibility of a large-scale personnel reshuffle starting from the vice president level. Currently, there are about 20 executives aged over 60 at the vice president level or higher within Samsung Electronics. Especially as this is the first personnel appointment laying the foundation for the 'New Samsung' envisioned by Chairman Lee, a large-scale promotion of capable young leaders and female executives is expected.
SK Group, which has traditionally conducted regular executive appointments on the first Thursday of December, is also expected to continue this tradition this year. The scale of personnel changes is expected to be limited, considering internal and external variables.
SK Vice Chairman and CEO Jang Dong-hyun and SK Innovation Vice Chairman and CEO Kim Jun, who have been in office for just over a year, are expected to be retained. It is also anticipated that SK Supex Council Chairman Cho Dae-sik, who enjoys strong trust from Chairman Chey Tae-won, and SK Square Vice Chairman and CEO Park Jung-ho will keep their positions. SK E&S Vice Chairman Yoo Jung-joon, who has been CEO since 2013 and took on the role of head of North American external cooperation for the group in March, is unlikely to be replaced.
Depending on the affiliate, SK Networks and SK Chemicals are also approaching the end of their terms next year, drawing attention to their future roles. Additionally, next-generation talents are expected to be selected for the group’s core businesses known as 'BBC' (Battery, Bio, Semiconductor).
There is also interest in whether Hyundai Motor Group, which traditionally conducted its personnel appointments in mid to late December and was the latest among the five major groups, will advance its schedule. The business community expects that in order to proactively respond to the U.S. Inflation Reduction Act (IRA) and rapid economic downturn, the appointments may be moved up to early to mid-December this year. Hyundai Motor Group, which appointed a record 203 new executives last year, is likely to seek management stabilization through this personnel appointment.
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