Yuhan Corporation Decides to Reinstate Chairman Position for the First Time in 28 Years Despite 'Privatization' Concerns

Chairman and Vice Chairman Positions Established at the General Meeting on the 15th
Only Granddaughter "Concerned About Power Concentration in One Person"
Chairman Lee Jeong-hee "No Intention to Assume Chairman Position"

"The establishment of the chairman position concentrates power on one side. What Dr. Yu Il-han emphasized was that the company should belong to the employees and shareholders." (Yu Il-ling, Director of Yuhan Foundation and granddaughter of Dr. Yu Il-han)

"I have said countless times that I have no intention whatsoever to be promoted just because the chairman position was created." (Lee Jeong-hee, Chairperson of Yuhan Corporation Board of Directors)

Dr. Yoo Ilhan, the late founder of Yuhan Corporation [Photo by Yuhan Corporation]

The '100-year company' Yuhan Corporation has reinstated the chairman position for the first time in 28 years. As the revival of the chairman and vice chairman positions became known, strong criticism arose that this was an attempt by a specific individual to privatize Yuhan Corporation, which had been operated as a 'company without an owner' following the will of the founder, the late Dr. Yu Il-han. However, Lee Jeong-hee, Chairperson of Yuhan Corporation's Board of Directors (and former CEO of Yuhan Corporation), who was pointed out as the mastermind behind this, drew a clear line by calling such suspicions "completely unfounded."

On the morning of the 15th, the regular shareholders' meeting held at Yuhan Corporation's headquarters in Dongjak-gu, Seoul, was noisy even before it started. Outside the company, employees opposing the establishment of the chairman position organized a truck protest funded by donations. The truck displayed messages such as "Dr. Yu Il-han returned all his assets to society and did not allow any family member to participate in management."

The controversy continued inside the building where the shareholders' meeting was held. Fierce debates took place inside and outside the large conference room on the 4th floor, the venue of the meeting. Yu Il-ling, director of Yuhan Foundation and granddaughter of Dr. Yu Il-han, had already voiced her criticism before the meeting, stating, "The establishment of the chairman position concentrates power on one side," and "What Dr. Yu Il-han emphasized was that the company should belong to the employees and shareholders." However, she refrained from speaking on this day. Director Yu said, "I did not come to disrupt the shareholders' meeting but to protect the company's values," and added, "Although I have already expressed concerns about the establishment of the chairman position, I will not voice any opinion even if the agenda is approved today."

Other shareholders attending the meeting also engaged in heated debates. The Yuhan Corporation shareholders' meetings, which had always been held in a quiet atmosphere, were filled with shareholders who came to speak out directly this time. Several shareholders voiced complaints about the lack of seating.

The controversy arose because the agenda to amend the articles of incorporation to create chairman and vice chairman positions was submitted at this shareholders' meeting. Since its founding in 1926, nearing 100 years, only two people have held the title of chairman at Yuhan Corporation: the founder Dr. Yu Il-han and the late advisor Yeon Man-hee, who closely assisted Dr. Yu.

Yuhan Corporation has been operated as a company without an owner, following Dr. Yu Il-han's belief that "profits earned through business activities should be returned to the society that nurtured the company." Dr. Yu changed the company from personal ownership to a joint-stock company in 1936, and in 1939, introduced the country's first employee stock ownership plan by distributing his 52% ownership stake to employees. Advisor Yeon introduced a 'rank retirement system' for senior executives during his tenure to ensure this principle continued. Executives had to retire after six years of reappointment if they were not promoted further. The CEO was no exception. In fact, all CEOs of Yuhan Corporation, including Chairperson Lee, stepped down from their positions six years after appointment.

Lee Jung-hee, CEO of Yuhan Corporation, is giving a lecture on the theme of true sharing and practice at the Global Welfare Forum held at the National Assembly on the 23rd. Photo by Yoon Dong-joo doso7@

However, Chairperson Lee was different from other CEOs who left the company after retirement. Even after stepping down as CEO, she remained with the company as a non-executive director and chairperson of the board. She has led the board for nine years. Lee joined Yuhan Corporation in 1978 and became CEO in 2015. She is credited with laying the foundation for Yuhan Corporation's resurgence by leading active research and development (R&D) investments and spearheading the development of the lung cancer treatment drug Lekraza.

However, with the push to establish the chairman position, controversy arose that Chairperson Lee, who naturally continues to hold the board chair position, might be trying to become chairman herself, going beyond being the behind-the-scenes power holder. Additionally, it was revealed that Yu Il-ling, director of Yuhan Foundation and a member of the founder's family, was excluded from the board of Yuhan Foundation, the largest shareholder of Yuhan Corporation. This raised suspicions that this was groundwork for taking control of management. This was also the reason why Director Yu, who was residing in the United States, hurriedly returned to Korea and appeared in person at the shareholders' meeting.

However, CEO Cho Wook-je explained the reason for establishing the chairman position by saying, "As the company grows bigger, amending the articles of incorporation is necessary," and "When inviting famous figures, conditions such as president and vice president are presented, but previously the conditions were quite difficult, so we received consulting that it would be better to revise the articles of incorporation." Yuhan Corporation has repeatedly emphasized the need to adjust executive ranks since the amendment proposal was disclosed, noting that as the company grows, there are already two presidents (CEO Cho Wook-je and Kim Yeol-hong, Head of R&D) and six vice presidents.

Also, CEO Cho, who was suspected of aiming for the vice chairman position, said, "I am old and will leave the company in three years," and "There is really no one trying to become chairman in the company right now."

Lee Jeong-hee, chairman of the board of directors, who was reappointed as a non-executive director of Yuhan Corporation, is leaving the general meeting venue. Chairman Lee reaffirmed his position, stating, "I have no intention whatsoever of becoming chairman."
[Photo by Yeom Da-yeon]

Despite ongoing controversy, the agenda submitted at the shareholders' meeting was approved with 95% of the voting rights present. Since Yuhan Foundation (15.8%) and Yuhan Academy (7.4%) hold a combined 23.2% as the largest shareholders, the proposal was expected to pass smoothly despite various controversies.

Accordingly, Yuhan Corporation can now appoint a chairman and vice chairman at any time by resolution of the board of directors. Chairperson Lee will continue as a non-executive director, and CEO Cho was reappointed. The company held an emergency board meeting during the shareholders' meeting and reappointed CEO Cho. Kim Yeol-hong, Head of R&D who joined Yuhan Corporation last year, also officially joined as an inside director.