‘Janginhwaho’ POSCO, Final Hurdle is 'National Pension Service' Vote... Uncertainty Until General Meeting

Largest Shareholder 국민연금's Position Emerges as Key Issue
"No Plans to Announce Position"... Vote Remains 'Uncertain'
Legal Risks from Luxurious Overseas Business Trip Controversy Add Variable

Jang In-hwa, former CEO of POSCO and the designated next chairman candidate of the POSCO Group, will officially take office after the regular shareholders' meeting and board of directors meeting on March 21. However, the final hurdle of passing the chairman appointment proposal remains. For the proposal to pass at the shareholders' meeting, a majority of the attending shareholders must approve it. The only major shareholder holding more than 5% of the shares is the National Pension Service (NPS). Therefore, the 'vote' of the NPS is crucial.

The largest shareholder, the National Pension Service, holds a 6.71% stake in POSCO Holdings. POSCO is a representative example of a widely held company often referred to as a 'company without an owner.' This term refers to companies whose ownership became dispersed after being government-invested or public enterprises and then privatized. POSCO, KT, KT&G, and various financial holding companies fall into this category.

Speculation Runs Wild... "No Plans to Announce Position" Draws a Line

According to POSCO Holdings on the 19th, the CEO Candidate Recommendation Committee (CRC) selected former CEO Jang In-hwa as the internal director candidate for chairman of the POSCO Group. Accordingly, at the regular shareholders' meeting scheduled for March 21, the 'chairman agenda' for candidate Jang will be presented, and he must secure a majority vote at the meeting to assume the chairmanship. The biggest hurdle is whether the National Pension Service's Stewardship Committee will approve. If the NPS Stewardship Committee does not pass the candidate, the POSCO chairman appointment will return to square one.

Earlier, on the 16th, when a media outlet reported that "the National Pension Service will announce its stance on former CEO Jang on the 19th," the NPS immediately refuted the claim within an hour. The NPS stated, "The article regarding the announcement of our position is completely unfounded, and there are no plans to announce any position," drawing a clear line. Unlike previous silence amid numerous speculations and expectations about the NPS's stance, the NPS responded unusually quickly when a report specified a date. In reality, the NPS's approval or disapproval remains 'in the fog' until the actual vote.

The reason the NPS's position is the subject of speculation is due to its past 'track record' of intervening in widely held companies. Kim Tae-hyun, chairman of the NPS, stated through the media during the POSCO chairman selection process that "fair opportunities without discrimination between insiders and outsiders must be provided." This statement has been interpreted by some as a negative view toward 'insiders.' Coincidentally, the final candidate Jang is a 33-year 'authentic POSCO man.' The fact that Jang is under investigation for a 'luxury business trip controversy' has also added weight to the possibility of the NPS's 'veto.'

Previously, when Koo Hyun-mo, CEO of KT, another widely held company, sought reappointment last year, Seo Won-joo, head of the Fund Management Headquarters (CIO), publicly opposed it. He issued a statement saying, "The CEO candidate selection does not meet the basic principle of a transparent and fair process." Koo Hyun-mo ultimately failed to be reappointed. Subsequently, KT experienced an unprecedented 'management vacuum' for five months before welcoming Kim Young-seop as the new CEO.

NPS Committee: "We Have Not Yet Reviewed the Matter"

Since the chairman candidate was designated, CIO Seo and Chairman Kim have not made any significant statements. Instead, calls for the NPS to clarify its position have emerged externally. A civic group in the Pohang region, the ‘POSCO Holding Headquarters and Future Technology Research Institute Pohang Relocation Citizens’ Committee,’ cited Jang’s 'luxury business trip' and argued that "the National Pension Service must immediately and actively exercise its legal authority in the POSCO chairman appointment." The group claims that Jang, who is under investigation by judicial authorities, is unqualified to be chairman.

However, the general view is that since the appointment process was conducted properly, there is neither reason nor justification for the NPS to oppose it. Whether the NPS exercises its voting rights for or against Jang’s appointment will be decided by the NPS Stewardship Committee, which consists of nine members. These members are recommended equally by regional subscriber groups, employer groups, and labor groups. A committee official stated, "Unless there are major disqualifications, the NPS basically votes in favor," adding, "The NPS oversees voting rights for about 800 companies, and POSCO has not yet been reviewed." Last year, among 4,046 agenda items at shareholders' meetings in which the NPS participated, only 13.8% (560 items) were opposed.