"Lower Executive Salaries," Shareholders Criticize... Emart Breaks a Sweat

"Conservatives Must Lower Their Limits Themselves" Criticism
Chairman Jung Calls for Strengthened Responsible Management

Emart Breaks Through Crisis by Strengthening Offline Presence
"At Least 5 New Stores to Open Within the Year"

"I am very curious about what the current CEO, company executives, and shareholders think about Chairman Jeong Yong-jin (Shinsegae Group) receiving an absurdly high compensation like last year."

On the 28th, at the Emart Annual General Meeting held at the Buyeong Taepyeong Building Convention Hall in Jung-gu, Seoul, the atmosphere was somewhat heavy, reflecting the company's situation of recording its first deficit since its founding last year. Shareholders unanimously criticized the poor performance and raised their voices demanding that Chairman Jeong strengthen responsible management.

On the morning of the 28th, at the Emart regular shareholders' meeting held at Taepyeong Building in Jung-gu, Seoul, Chairman Kang Seung-hyeop (Head of Shinsegae Property Support Headquarters) is making a procedural remark. / Photo by Goo Eun-mo @gooeunmo

At the meeting, one shareholder said, "Despite the deteriorated performance last year and the company-wide voluntary retirement plan initiated for the first time since the company's founding, Chairman Jeong Yong-jin's compensation is excessive," and requested that "Chairman Jeong formally register as a registered director to take responsible management." Another shareholder also demanded, "Some companies have directors voluntarily returning their compensation during crises such as deficits," and called for lowering the compensation limit.

Chairman Jeong received a total of 3.699 billion KRW from Emart last year, including a salary of 1.982 billion KRW and a bonus of 1.717 billion KRW. This is an increase of 84 million KRW (2.3%) compared to 3.615 billion KRW in 2022.

Regarding this, Kang Seung-hyeop, head of the Shinsegae Property Support Headquarters and chairperson of the meeting, explained, "We deeply acknowledge responsibility for last year's performance through a complete replacement of management," and added, "Last year's director salaries and bonuses were determined based on quantitative indicators, key initiatives, and core task evaluations, and thus were executed at a lower level compared to the previous year."

According to Emart’s business report, out of the approved director compensation of 7 billion KRW last year, 4.5 billion KRW was paid, while in 2022, 4.8 billion KRW was paid out of an approved 10 billion KRW.

Emart recorded its first annual operating loss last year. The consolidated operating loss was 46.9 billion KRW, turning to a deficit from an operating profit of 135.7 billion KRW the previous year. The standalone operating profit, centered on the core large-scale supermarket business, also decreased by about 27% to 188 billion KRW. This poor performance was reflected in the stock price. Emart’s stock closed at 68,400 KRW the previous day, down 34% from 103,800 KRW a year ago.

To improve the poor performance, Head Kang announced plans to strengthen offline capabilities, the core business. He said, "We confirmed the potential for offline structural improvement by renewing the existing Emart into an experiential shopping mall," and added, "This year, we will integrate purchasing, logistics, and marketing functions of Emart, Emart Everyday, and Emart24 offline stores to restore the essence of the business."

As a measure to strengthen offline capabilities, resuming new store openings was proposed. They plan to secure at least five new store locations within the year and strengthen offline stores by planning them as 'grocery-specialized hard discount stores.' Head Kang stated, "To leap forward as a new Emart, this year will be the 'second founding' year of Emart, solidifying our leading position in the industry," and added, "Through this, we will strive to share performance and value with customers, shareholders, employees, and partners."

Shareholders generally responded positively to this vision. One shareholder, who stated that they have continuously invested since Emart’s listing in 2011 for 13 years, said, "It has been very frustrating and infuriating to see Emart’s stock price repeatedly falling to low levels," but added, "I will try to trust again the plan to strengthen the offline core business and the second founding this year." The shareholder further requested, "I hope that next year at this meeting, you will respond to shareholders’ trust with better stock prices and dividends than now."