KT&G Wins Overwhelming Victory in Shareholders' Meeting Vote
Cash Dividend Proposal of 5,000 KRW per Share Approved
Appointment of Outside Directors Recommended by KT&G Board
At the KT&G shareholders' meeting held on the 28th, KT&G achieved a landslide victory against the 'activist funds.' In the vote battle over key agenda items, individual shareholders sided with KT&G, resulting in most proposals being passed as proposed by the KT&G board of directors.
On the morning of the 28th, the 36th KT&G shareholders' meeting was held at the headquarters' Talent Development Center in Daedeok-gu, Daejeon. [Photo by KT&G]
KT&G held the shareholders' meeting at around 11:30 a.m. at the Talent Development Center at its headquarters in Daedeok-gu, Daejeon. Originally scheduled for 10 a.m., the meeting was delayed by about an hour and a half due to the time taken to count the shares and shareholders present, as many small shareholders arrived early at the venue.
At the meeting, over 30 agenda items were presented, including proposals from activist funds Andaz Asset Management and Flashlight Capital Partners (FCP). These included ▲approval of financial statements ▲partial amendments to the articles of incorporation ▲acquisition of treasury stock ▲increase and appointment of outside directors ▲appointment of audit committee members ▲approval of director remuneration limits, among others.
The biggest focus of the shareholders' meeting was the dividend amount and the appointment of outside directors. Regarding the cash dividend proposal, the board's suggestion of 5,000 KRW per common share was approved. Previously, Andaz Asset Management and FCP had demanded dividends of 7,867 KRW and 10,000 KRW per share, respectively. The KT&G board had proposed a dividend of 5,000 KRW per share.
Regarding the appointment of outside directors, the proposal to appoint Kim Myung-chul and Ko Yoon-sung, recommended by KT&G, was accepted by vote. The two appointed outside directors were also appointed as members of the audit committee. The proposal by the activist funds to increase the number of outside directors was rejected, maintaining the current number of six outside directors.
On the morning of the 28th, the 36th KT&G General Shareholders' Meeting was held at the Talent Development Center of the headquarters in Daedeok-gu, Daejeon. [Photo by KT&G]
Earlier, the KT&G board recommended Kim Myung-chul, former CFO of Shinhan Financial Group; Ko Yoon-sung, professor at Hankuk University of Foreign Studies; and Lim Il-soon, former CEO of Homeplus. Andaz Asset Management nominated Lee Soo-hyung, former chief judge of the Seoul Central District Court; Kim Do-rin, former executive director of Louis Vuitton Korea; and Park Jae-hwan, professor at Chung-Ang University. FCP nominated Cha Seok-yong, former CEO of LG Household & Health Care; and Hwang Woo-jin, former CEO of Prudential Life Insurance Korea, among others.
Among other proposals from the activist funds, amendments related to the evaluation and compensation committee regulations and the addition of authority to decide on treasury stock cancellation were rejected. With the rejection of the related articles of incorporation amendments, the proposal for treasury stock cancellation was automatically discarded, and the proposal for treasury stock acquisition was also rejected. However, the proposal to introduce quarterly dividends, which was also supported by the board, was approved.
The shareholders' meeting attracted attention as the voting results were expected to bring significant changes to the company's management situation. Ultimately, with the failure of the activist funds' shareholder proposals, KT&G is expected to maintain its current business structure stably. After the meeting, KT&G announced that it will pursue enhancing corporate value to maximize the value for a wide range of stakeholders, including shareholders who share corporate performance, employees who are the foundation and competitiveness of the business, customers who purchase products, and partner companies who share the growth process.
KT&G labor union is protesting against the proposal of the activist fund ahead of the 36th KT&G shareholders' meeting held on the 28th at the Talent Development Center of the headquarters in Daedeok-gu, Daejeon. [Photo by KT&G]
Baek Bok-in, CEO of KT&G, said, “We respect the judgment of shareholders who trusted and supported the company's long-term shareholder value enhancement strategy through future growth investments. Going forward, KT&G's management and board of directors will strengthen communication with various stakeholders, including shareholders, customers, employees, and partners, and make every effort to enhance shareholder value and corporate value.” He added, “We will leap forward as a global top-tier company through long-term growth investments, technological innovation, and aggressive expansion into overseas markets.”
Meanwhile, before the official start of the shareholders' meeting, a protest opposing the activist funds' proposals was held. Members of the National Tobacco and Ginseng Labor Union held a demonstration in front of the Talent Development Center that morning, demanding the immediate withdrawal of shareholder proposals from speculative capital that pursue only short-term profits.
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