Kakao's Hong Eun-taek: "If the stock price doesn't double, I will forgo stock options... Management must lead by example"

Baek Jae-hyun and Jung Shin-ah Appointed Directors... Discovering Growth Engines
Hong Eun-taek "Will Forfeit Stock Options If Stock Price Does Not Double"

Kakao has formed a board of directors composed of investment experts. Through this, it plans to concretize synergies with SM Entertainment (SM), which it successfully acquired, while also fostering new growth engines such as artificial intelligence (AI) and healthcare.

On the 28th, Kakao held the 28th General Shareholders' Meeting at its headquarters in Jeju City, Jeju Special Self-Governing Province. At this meeting, Pae Jae-hyun, Kakao Community Investment Chief Investment Officer (CIO), was newly appointed as an inside director, and Jeong Shin-ah, CEO of Kakao Ventures, was newly appointed as a non-executive director.

CIO Pae is the person who led the acquisition of SM. He is an investment expert from CJ who joined Kakao in 2015. He played an active role in the big deal team that led the large-scale mergers and acquisitions (M&A) when Kakao acquired Melon. Recently, he has been at the forefront of Kakao Entertainment’s trillion-won scale large investment attraction as well as the SM acquisition process.

CEO Jeong is also an investment and finance expert. She is the only female CEO among Kakao affiliates and graduated from the University of Michigan’s Business School. She has an impressive career, including being a consultant at Boston Consulting Group, strategy and new business development manager for eBay Asia-Pacific (APAC), and senior vice president at NHN. At Kakao Ventures, she has invested in numerous startups in the healthcare and AI sectors.

From the left, Bae Jaehyun, Chief Investment Officer (CIO) of Kakao Community, and Jeong Sinha, CEO of Kakao Ventures [Photo by Kakao]

Attorney Shin Seon-kyung from the law firm Liu joined as an outside director. Attorney Shin is a legal expert who holds a domestic lawyer license, completed a Master of Laws program at Stanford University Law School, and obtained a New York State attorney license in the United States.

With the newly formed board, Kakao plans to actively realize synergies with SM. To prepare for mid- to long-term growth engines, it will continue investing in AI and healthcare sectors. The roles of CIO Pae, who led the SM acquisition, and CEO Jeong, who has led startup investments, are essential in these areas.

In his greeting at the shareholders’ meeting, Kakao CEO Hong Eun-taek stated, "We will create new synergies based on the global intellectual property (IP) held by SM and the IT technology owned by Kakao," adding, "We will promptly complete the acquisition and concretize business cooperation." He continued, "Within this year, we plan to quickly launch AI-based vertical services to create new opportunities and release new services in the healthcare sector."

Audit committee member Yoon Seok, Professor Choi Se-jung of Korea University’s Media Department, and Assistant Professor Park Sae-rom of Sungshin Women’s University’s Convergence Security Engineering Department were reappointed as outside directors. With this, Kakao completed the formation of a board consisting of seven members: two inside directors, one non-executive director, and four outside directors. The number of female directors increased to four, raising the proportion of women on the board.

A proposal to lower the total remuneration limit for the seven directors from 12 billion KRW to 8 billion KRW was also passed. The retirement pay rate for the CEO was raised to three times the base amount; however, this will apply starting from the next CEO according to CEO Hong’s intention. Additionally, CEO Hong plans to forfeit 50,000 stock options he holds if the stock price does not rise more than twice. He said, "If the stock price does not double during my tenure, I will give up the stock options," emphasizing, "Especially in difficult conditions, the management must lead by example."

Other agenda items, including the cancellation of treasury shares and partial amendments to the articles of incorporation, were approved. The business purpose was expanded to include "recording and music video production," and 1,897,441 treasury shares will be canceled to enhance shareholder value.

Meanwhile, 4,024 shareholders participated in the 28th regular shareholders’ meeting, recording a participation rate of 30.5% excluding the largest shareholder and related parties. The total participation rate was 54.7%. Shareholders holding 42,882,453 shares, accounting for 17.9% of the shares present, exercised their voting rights through electronic voting.