[New Business World 3rd and 4th Generation] ⑤ 41-Year-Old Vice Chairman Jeong Gi-seon... Presence Through Technology Management and New Organizational Culture

Jeong Gi-seon, the third-generation owner who was promoted to vice chairman just two years after becoming president of HD Hyundai, is making his presence felt externally through 'technology management' and internally by focusing on 'improving corporate culture.' Examples of technology management include autonomous ships utilizing artificial intelligence (AI) and the Future-Oriented Shipyard (FOS) project, while the recently announced plan to foster female talent aligns with efforts to improve internal culture.

Vice Chairman Jeong's approach starts with frequently meeting employees to review work and listen to their concerns. Within a month of his promotion, he visited technology sites twice as part of official schedules. At the keynote speech for CES 2024 early next year, he will present the vision for the construction machinery sector emphasizing new technologies. It is reported that Jeong is particularly interested in integrating hydrogen and AI with the group’s key businesses such as shipbuilding, refining, construction machinery, and power equipment.

Upon becoming the head of the holding company, Jeong initiated a branding effort to shed the manufacturing image by changing the group name for the first time in 20 years. In March last year, the company name was changed from Hyundai Heavy Industries Holdings to HD Hyundai. Starting this March, the prefix 'HD' was added to the names of major affiliates. With a full-scale push for the new brand this year, advertising expenses reached 72.8 billion KRW by September, surpassing the total amount spent in the previous year.

Born in 1982, Vice Chairman Jeong is the grandson of the late Chung Ju-yung, honorary chairman of Hyundai Group, and the eldest son among two sons and two daughters of Jeong Mong-joon, chairman of the Asan Foundation and the group’s largest shareholder. He graduated from Daewon Foreign Language High School and Yonsei University with a degree in economics, and completed his military service as a ROTC officer, class 43. Unusually for a member of the owner family, he has experience working as an intern reporter at a media company.

Jeong joined HD Hyundai Heavy Industries’ Ulsan headquarters finance team as an assistant manager in 2009 but soon went to study abroad in the United States. He earned an MBA from Stanford Graduate School of Business. Returning to Korea in 2011, he worked for about two years at Boston Consulting Group Korea before rejoining HD Hyundai Heavy Industries in 2013 as senior manager of the corporate planning team. He was promoted to managing director within a year, then to executive director the following year, and to vice president two years later, marking a rapid rise.

Jeong has solidified his leadership by placing trusted aides in key positions. Kim Seong-jun (53), vice president and head of HD Korea Shipbuilding & Offshore Technology Research Institute, and Kim Wan-su (54), vice president and head of HD Hyundai’s corporate planning office, both recruited by Jeong, were appointed CEOs of HD Korea Shipbuilding & Offshore and HD Hyundai Robotics, respectively. These two have closely assisted Jeong throughout their tenure, consulting on major group management decisions.

Several attempts to prove Jeong’s management capabilities are expected to proceed smoothly. There are ample opportunities to build performance as the industry recovers. The group’s core shipbuilding business has emerged from a prolonged slump, and the power equipment business, which had been running at a loss, is now thriving with orders driven by renewable energy and infrastructure investments in the U.S. and the Middle East.

On January 4, a day before the opening of 'CES 2023' (local time), Jung Ki-sun, Vice Chairman of HD Hyundai, and Joel Myers, CEO of the American weather forecasting service company AccuWeather, are seen conversing at the Fortune Brainstorm Tech Dinner.
[Photo by HD Hyundai]

Jeong’s status as the group’s top figure has been established through his rapid promotions and titles. However, challenges remain in securing actual control through share succession. His father, Chairman Jeong, who stepped back from management after announcing his presidential bid in 2002, remains the largest shareholder with a 26.6% stake in HD Hyundai. Vice Chairman Jeong holds only 5.26%. Transferring shares would incur a heavy inheritance tax burden.

The value of Chairman Jeong’s shares is approximately 1.3 trillion KRW. A simple calculation applying the maximum inheritance tax rate of 60% with a controlling shareholder premium suggests that Vice Chairman Jeong’s expected inheritance tax would be about 780 billion KRW. Over the past five years, Jeong has received 84.4 billion KRW in dividends from HD Hyundai, and his annual salary approaches 600 million KRW, but this is insufficient.

Industry insiders expect him to secure funds through affiliate initial public offerings (IPOs). HD Hyundai Global Service is preparing for an IPO targeting the first half of next year, and HD Hyundai Robotics is also expected to pursue an IPO within a few years. HD Hyundai Oilbank, which has withdrawn three times due to sudden market changes despite previous IPO attempts, may also make another attempt.