"Hybe's Highest Salary is Min Hee-jin... Hybe Directly Refutes Claims of Slave Contracts"

Hive's 12 Rebuttals to Min Hee-jin's Claims
"CEO Min Proposes Unacceptable Amount Despite Massive Stock Compensation"
"Non-Compete Clause in Shareholders' Agreement Is Common... Cannot Be Seen as a Slave Contract"

HYBE has issued a direct rebuttal through a statement regarding the contents of a press conference held by Min Hee-jin, CEO of its subsidiary ADOR.

Min Hee-jin, CEO of ADOR, is making a statement on the 25th at the Korea Conference Center in Seocho-gu, Seoul, regarding the conflict with the parent company HYBE. Earlier, HYBE announced the results of an interim audit on ADOR's management, including CEO Min Hee-jin, and stated that they would file charges against them for breach of duty and other allegations. Photo by Kang Jin-hyung aymsdream@

On the 26th, HYBE officially announced to the media, "We would like to clarify the facts regarding the statements made by Min Hee-jin, CEO of ADOR, at the press conference on the 25th, in order to protect shareholder value and intellectual property." Previously, HYBE had stated immediately after Min's press conference on the 25th that "it is not worth responding," but released a detailed position the following day.

First, regarding Min's claim that the "attempt to seize management rights was a joke or casual talk," HYBE pointed out, "Records of discussions conducted over several months with the same purpose remain in transcripts and work logs," adding, "Casual talk over a long period and multiple occasions, especially when involving a third party, is no longer casual talk but a plan and its execution. Moreover, the vice president involved in these conversations is a certified public accountant with professional knowledge of corporate governance and has handled HYBE's listing and numerous M&As."

They continued, "Additionally, the vice president was a key executive at ADOR with full access to the company's financial information. This vice president even noted in the work log the CEO's remark that 'ultimately, we will get out.' This cannot be considered a joke. The amount obtainable through exercising put options was already presented, and the timing of actions was specified in detail."

Regarding Min's statement at the press conference about a "2 billion KRW annual salary" and the claim that "monetary compensation was insufficient," HYBE rebutted, "The 2 billion KRW is an incentive for 2023 performance, separate from salary and long-term incentives. This ranks first overwhelmingly among HYBE headquarters and Korean subsidiaries' employees," adding, "Min proposed an amount unacceptable to the company, leading the dialogue to collapse."

Previously, Min had reported internal whistleblowing concerning similarities between NewJeans and ILY:1 and claimed that HYBE dismissed her without response. HYBE responded, "We sent a detailed reply of six A4 pages," and disclosed partial screenshots of the sent email as evidence.

Regarding the claim that there was no guidance on returning information assets, HYBE stated, "We repeatedly contacted Min via phone calls, emails, and text messages to retrieve information assets, but she did not respond."

Hive is entering into conflict, including launching an audit of the management of Adore, a subsidiary to which the group NewJeans belongs. The photo shows the Hive headquarters in Yongsan. Photo by Yongjun Cho jun21@

At the press conference, Min accused Chairman Bang Si-hyuk and CEO Park Ji-won of breaking their promise to debut NewJeans as HYBE's first girl group. HYBE described this as a "distorted interpretation mechanism," explaining, "The debut was delayed because the company was split and contracts were transferred during the process of debuting NewJeans in the way Min wanted."

Regarding Min's mention of a "NewJeans promotion boycott," HYBE explained, "Since LE SSERAFIM and NewJeans debuted consecutively, there was insufficient time for mutual promotion, so a promotional period was set for a certain time," adding, "In response to the internal whistleblowing, we stated that HYBE's communication team is fully committed to NewJeans PR, having prepared and distributed 273 press releases solely for NewJeans last year."

They further added, "HYBE respected Min's opinion and transferred these members to ADOR despite Source Music's opposition, supporting them with a large fund of 16 billion KRW to enable NewJeans' debut in the manner Min desired. Due to the company split and contract transfers during this process, NewJeans' debut schedule was inevitably delayed, unrelated to HYBE's intentions."

HYBE also clarified the "non-compete clause in the shareholder agreement," which Min and her legal representatives claimed could not be disclosed. HYBE stated, "This is a common clause in any industry," and "It is not true that it binds forever. Min can sell her shares starting November this year, and if she sells, the non-compete will not apply from November 2026, when her employment contract expires."

Min previously criticized HYBE for announcing an audit to the media ahead of NewJeans' comeback, calling it a failure to protect the artists. HYBE responded, "It was Min's side that attacked the company by email around NewJeans' comeback," explaining, "We had accepted and compromised with Min's repeated demands for years, but this time realized these demands were part of a so-called 'build-up' to seize management rights, and had no choice but to conduct the audit to protect the value of the multi-label regardless of timing."

Regarding Min's claim that the shaman was "just a friend," HYBE stated, "During conversations, undisclosed executives' stock option quantities, names of potential investors, and shareholding ratios per investor related to the management rights takeover structure were discussed, and decisions on various management issues were made based on the shaman's suggestions. Such a conversation partner cannot be considered a mere acquaintance. The company takes seriously the indiscriminate exposure of important company information to an external person not affiliated with the company, interference in decision-making, and receiving recruitment requests."

Group NewJeans. [Photo by ADOR]

The following is HYBE's full official statement.

Hello.

This is HYBE.

We would like to clarify the facts regarding the statements made by Min Hee-jin, CEO of ADOR, at the press conference on the 25th to protect shareholder value and intellectual property.

1. Regarding the claim that the management rights takeover was a joke or casual talk

Records of discussions conducted over several months with the same purpose remain in transcripts and work logs. Casual talk over a long period and multiple occasions, especially when involving a third party, is no longer casual talk but a plan and its execution. Moreover, the vice president involved in these conversations is a certified public accountant with professional knowledge of corporate governance and has handled HYBE's listing and numerous M&As. Additionally, the vice president was a key executive at ADOR with full access to the company's financial information. This vice president even noted in the work log the CEO's remark that "ultimately, we will get out." This cannot be considered a joke.

Documents calculating the amount obtainable through exercising put options, specifying the timing of actions, and containing terms such as infringement lawsuits, investors, and public opinion campaigns have been found multiple times and should not be dismissed as jokes. There is even a record instructing the vice president to "treat this as casual talk."

2. Regarding the claim that monetary compensation was insufficient

Min claimed her "annual salary is 2 billion KRW." More precisely, the incentive for 2023 performance is 2 billion KRW, with salary and long-term incentives separately set. This ranks first overwhelmingly among HYBE headquarters and Korean subsidiaries' employees.

HYBE also provided substantial stock compensation. The value of the stock is an amount unimaginable to the general public. Nevertheless, Min proposed an amount unacceptable to the company, leading the dialogue to collapse. We view this process as an attempt to justify independence in management rights.

3. Regarding the claim that an audit was conducted immediately without responding to the internal whistleblowing email

We sent a detailed reply of six A4 pages at 10:01 AM on April 22 (*photo attached). We also confirmed that Min read the reply around 12 PM on the same day. However, Min repeatedly claims in her statement and press conference that "no response was received."

The audit was conducted after recognizing attempts to seize management rights over several months through internal and external information and confirming the leakage of documents classified as management secrets. It is unreasonable to demand prior notice of the audit schedule for serious misconduct.

4. Regarding the claim that there was no guidance on returning information assets

As part of the audit procedure, we visited the studio and residence located in Mapo-gu, Seoul, at 10 AM on April 22 to retrieve information assets. During this process, we repeatedly contacted Min via phone calls, emails, and text messages, but she did not respond. On the evening of the 23rd, after the return deadline expired, we again requested the return of information assets through Vice President Shin of ADOR. Shin replied, "Min is busy and hasn't done it yet." It is irresponsible and false to claim that learning about the return of information assets through the media without prior notice is a media play.

The claim that computer assets were taken away before the comeback to prevent work is also false. We provide new laptops immediately upon return and download existing materials to ensure no disruption to work. Other audit subjects also received new devices and are working.

5. Regarding the claim that there was a promise to debut NewJeans as the first girl group

This was already answered in detail in an email sent to Min on the 22nd. The reason Min claims she did not receive the email seems to be because such provocative but untrue claims cannot be made if she had seen the reply. We sent the following detailed response.

Min herself has revealed this process. In an interview with a media outlet published on March 24, 2022, she stated that the girl group project proceeded under her plan and announced the third quarter of 2022 as the launch time. She said, "A rushed debut would be a great burden on the young members. I did not want to rush everyone, so I set the reasonable timing as the third quarter of 2022."

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6. Regarding the claim that NewJeans was told not to promote at debut

Due to the R&R dispute between Source Music and Min, NewJeans' debut schedule was delayed, and LE SSERAFIM debuted first. Since the two teams debuted consecutively, there was insufficient time for mutual promotion, so a minimum promotional period was set. Also, Sakura from LE SSERAFIM had been the subject of numerous articles about a possible transfer to HYBE even before signing with HYBE. In this situation, calling ADOR's debut team "a team composed only of rookies" risked exposing Sakura's joining Source Music and information about NewJeans' member composition. The request was made to protect the news value of both teams, and the promotional period was shortened midway to start NewJeans' promotion. We have already provided the following response by email.

Min's claims differ significantly from the perceptions of members who know how much support and concession Source Music and HYBE have provided for ADOR's success.

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7. Regarding the claim that NewJeans' promotion was neglected

We also provided a detailed response to this claim in the internal whistleblowing email.

8. Regarding the claim of a slave contract

The non-compete clause in the shareholder agreement is confidential but was mentioned by Min at the press conference. Non-compete clauses are requested by buyers to prevent unfair competition by founding a business in the same industry after selling shares. This is common in any industry.

It is also untrue that it binds forever. Min can sell her shares starting November this year, and if she sells, the non-compete will not apply from November 2026, when her employment contract expires.

Min is guaranteed a large amount, to the extent she said, "I earn 100 billion KRW even if I do nothing," and the conditions allowing cashing out and starting a business in the year after next cannot be called a slave contract. These are unprecedentedly generous compensation conditions unimaginable to the general public.

Even Min's KakaoTalk conversations with close associates include a note about exercising put options to exit on January 2, 2025.

The clauses Min calls slave contract clauses related to sales had differences in interpretation regarding priority between two clauses, and we already responded in December last year that ambiguous clauses would be clarified and amended to avoid issues. Min said she "does not care about money," but the core issue that triggered discussions was the scale of compensation.

9. Regarding the claim to practice ESG management

We are practicing ESG management activities within the scope we can pursue. Min disparaged the company's eco-friendly album efforts as "melting photocards are wordplay." The company invested significant personnel and costs to replace plastic materials in digital albums with paper and to switch album cases and photocards to environmentally friendly biodegradable materials. Accepting and investing in this is ESG management. We are promoting the expansion of eco-friendly albums across all HYBE labels, but internal members know that ADOR is the most uncooperative label.

10. Regarding the claim that there was no attempt to communicate

HYBE has continuously discussed changes to the shareholder agreement with Min, but discussions stopped when the inquiry Min claims as internal whistleblowing arrived at HYBE. Nevertheless, HYBE sincerely responded to the issues Min claims as internal whistleblowing. However, during the shareholder agreement negotiation period, Min was found through the audit to have secretly engaged HYBE's internal lawyers and accountants for advice on changing the shareholder agreement and raising issues in the form of internal whistleblowing, and contacted law firms and institutional investors to discuss management rights takeover.

11. Regarding the claim that the shaman was just a friend

An external person who intervenes in management in detail cannot be considered a mere friend. During conversations, undisclosed executives' stock option quantities, names of potential investors, and shareholding ratios per investor related to the management rights takeover structure were discussed, and decisions on various management issues were made based on the shaman's suggestions. Such a conversation partner cannot be considered a mere acquaintance. The company takes seriously the indiscriminate exposure of important company information to an external person not affiliated with the company, interference in decision-making, and receiving recruitment requests.

12. Regarding the claim questioning why HYBE does not cherish NewJeans at comeback time

It was Min's side that began attacking the company by email around NewJeans' comeback. Forensic data includes records of Min's instructions to prepare a public opinion campaign from April and to create noise to harass the company. We ask whether Min expected the company to accept unreasonable compensation demands if pressured during this period. The side threatening the company by holding artists hostage is Min. If the compensation proposal is accepted, fine; if not, it is used as a pretext to end the relationship.

We have accepted and compromised with Min's repeated demands for years, but this time realized these demands were part of a so-called 'build-up' to seize management rights, and had no choice but to conduct the audit to protect the value of the multi-label regardless of timing. Our repeated proposals not to mention artists in press conferences and interviews are because we value the artists' worth.