[Reshaping Financial Shareholders' Meetings] ① 'New Wine in New Wineskins' 50% Chairman Replacement... Over 10 New Outside Directors Recommended

Interest Grows in JB-Eolline Shareholder Meeting Vote Battle Over 'Dividends'

The regular shareholder meeting season for eight domestic bank-affiliated financial holding companies is about to begin. Four CEOs, accounting for half of them, will be replaced with new faces, and about ten outside directors will also be newly appointed, signaling the full-scale reshuffling in the financial sector.

According to the financial sector on the 16th, regular shareholder meetings of major domestic financial holding companies will be held consecutively starting from the 17th. On the 17th, BNK Financial Group's meeting is scheduled; on the 23rd, Shinhan Financial Group; on the 24th, KB, Hana, and Woori Financial Groups; and on the 30th, JB and DGB Financial Groups will hold their meetings. NH Nonghyup Financial Group's schedule is undecided.

At this shareholders' meeting, CEOs who have led the financial sector through long-term reappointments will step down, and new faces will emerge. Shinhan Financial Group will officially debut Jin Ok-dong as the designated CEO and chairman, Im Jong-ryong will be the designated CEO at Woori Financial Group, and Bin Dae-in will be the designated CEO at BNK Financial Group. Prior to this, at NH Nonghyup Financial Group, former chairman Son Byung-hwan stepped down, and Lee Seok-jun took the helm.

New outside directors will also appear. DGB Financial plans to appoint four new outside directors at the shareholder meeting on the 30th, and BNK Financial will appoint three new outside directors. Additionally, KB Financial (3), Hana, and Woori Financial Groups (2 each) have recommended new outside director candidates.

JB Financial did not recommend new outside directors, but Align Partners, the second-largest shareholder (14.04%), proposed candidate Kim Ki-seok (former BOA Seoul representative) through a shareholder proposal, drawing attention to the vote battle. Shinhan Financial did not recommend new outside director candidates, but due to the expiration of terms (1 person) and resignations (2 people) of existing outside directors, the number of outside directors has slimmed down from 12 to 9.

Many outside directors whose terms expired were reappointed despite controversies surrounding their long tenure. Each company explained that they considered the expertise of the outside directors, but the global proxy advisory firm ISS recommended opposing the reappointment proposals for Shinhan Financial, Hana Financial, and Woori Financial's existing outside directors, citing their 'collective inaction' regarding various financial accidents.

Another key point of this shareholders' meeting is the confrontation with activist private equity funds (PEFs) over dividends. This comes as the five major financial holding companies posted a combined net profit exceeding 18 trillion won last year, thanks to the Federal Reserve's rapid interest rate hikes. Align Partners demanded dividend increases and shareholder returns from seven domestic bank-affiliated financial holding companies, excluding NH Nonghyup Financial, in January.

Particularly noteworthy is JB Financial Group. JB Financial and Align Partners are currently competing to secure proxy votes ahead of the regular shareholders' meeting on the 30th. JB Financial decided on a cash dividend of 715 won per common share (annual dividend payout ratio of 27.0%), but Align Partners, the second-largest shareholder (14.04%), has proposed a cash dividend of 900 won per common share (annual dividend payout ratio of 33%) through a shareholder proposal, signaling a vote battle.

Regarding outside directors, Align Partners opposed the reappointment of outside director and audit committee candidate Sung Je-hwan (former president of Wonkwang Digital University), whom JB Financial recommended for reappointment, and also proposed its own outside director candidates. Align Partners emphasized, "We believe JB Financial should become a bank that is more valuable to shareholders rather than just a bigger bank," but JB Financial responded, "This year's dividend payout ratio is 27.0%, up 4 percentage points from last year, the highest level in the industry."

The remaining issue is the vote battle. Looking at JB Financial's governance structure, the largest shareholder is Samyang Corporation and its affiliates, holding 14.61% of shares. The difference with Align Partners (14.04%) is less than 0.50 percentage points. The key is the choices of other major shareholders such as OK Savings Bank (10.21%), the National Pension Service (7.79%), and the PEF The Capital Group (5.11%).

A financial sector official said, "Given OK Savings Bank's recent deteriorating performance, it is likely to side with Align Partners for dividend income, but since financial authorities are actively warning against the financial sector's 'profit party,' this cannot be ignored."