Samsung Regular Personnel Changes Delayed Beyond Expectations
Interest in Memory Division Executives' Positions
Need for Crisis Overcoming Message
Attention on Possible Drastic Personnel Changes
Samsung Electronics' regular personnel reshuffle is being delayed beyond the timing initially anticipated by the business community. Interpretations suggest that the management, including Chairman Lee Jae-yong, is taking longer than expected to deliberate on the personnel matters. As the announcement is delayed, various speculations about the personnel changes are rampant.
According to the business community on the 21st, Samsung Electronics reportedly drafted a personnel and organizational restructuring plan earlier this month and has been repeatedly gathering feedback and making revisions. At the end of last month, some in the business community predicted the personnel changes would occur on the 8th or 18th of this month. These dates gained traction based on analyses that the company would swiftly implement personnel renewal to overcome the current market crisis. However, no personnel changes were made on these two dates. Recently, rumors have emerged that the reshuffle will take place between the 21st and 22nd.
While this is interpreted as an effort to find the best personnel plan, compared to previous years, this year's personnel reshuffle is taking somewhat longer for revisions and refinements.
Source of Crisis Rumors: Will the Memory Division Leadership Be Replaced?
Since the personnel season began, the most attention within Samsung Electronics has been on the fate of executives who led the memory semiconductor business. As market analyses have repeatedly pointed out that the business crisis was triggered by the company falling behind in the memory market, including high-bandwidth memory (HBM), calls for personnel actions regarding those involved have surfaced in various quarters. Vice Chairman Jeon Young-hyun, who was appointed this year in a one-point personnel move as head of the Device Solutions (DS) division, is expected to retain his position and continue to be given opportunities. However, the futures of President Lee Jung-bae, head of the Memory Business Division, President Choi Si-young, head of the Foundry Business Division, and President Park Yong-in, head of the System LSI Business Division, are reported to be uncertain. President Lee’s term as an inside director is scheduled to end in March next year, increasing the likelihood of replacement. With Vice Chairman Jeon remaining, it is expected that the continuity of ongoing projects will not be significantly affected despite a major reshuffle of the president-level executives. Some speculate that since Vice Chairman Jeon is an engineer by background, many engineer-origin executives will be positioned in the president group. The business community is paying attention to the fact that leading global companies are appointing engineers as CEOs, and there are many calls for changes in Samsung Electronics’ executive team, which currently has many executives with business administration backgrounds.
Internal Cohesion and the US Presidential Election: Hunting Two Rabbits
Samsung Electronics is also expected to reflect criticisms regarding ‘governance’ that surfaced amid the crisis following the Q3 earnings announcement in this year’s personnel reshuffle. For Chairman Lee, a clever solution to resolve this issue is necessary in this personnel move. This is why there is speculation that a new president group will be formed by finding the right person who can unify the organization and motivate employees. At the same time, individuals who can respond accurately and swiftly to the rapidly changing global market are likely to be promoted. In particular, those familiar with the US situation are expected to be favored. Since the US is likely to experience significant changes starting January next year with the inauguration of President-elect Donald Trump, Samsung Electronics, which sells many smartphones and home appliances in the US and needs to expand semiconductor cooperation with global tech companies, needs to find a breakthrough through this personnel reshuffle.
Will There Be a Radical Personnel Change?
Given that Chairman Lee needs to convey a message of overcoming the crisis, the possibility of radical personnel changes cannot be ruled out. The business community widely analyzes that Samsung Electronics could bring back executives who have already left the company or introduce external personnel capable of making cold judgments and giving frank advice to stir fresh winds within the company. There is also talk that executives who have performed well in affiliates, such as President Jang Deok-hyun of Samsung Electro-Mechanics, could join the Samsung Electronics president group. Samsung Electro-Mechanics, led by President Jang, has recorded remarkable strong performance in the multilayer ceramic capacitor (MLCC) business, an area of great interest to Chairman Lee.
Decisions regarding presidents whose terms as inside directors are about to expire are also considered a crucial variable that will influence the direction of the personnel reshuffle. The key figures are Noh Tae-moon, head of the Mobile Experience (MX) Business Division; Park Hak-gyu, head of the Management Support Office; and Lee Jung-bae, head of the Memory Business Division. These three will see their inside director terms expire in March next year. Consequently, the board of directors, currently composed of four inside directors and six outside directors, will need to be reconstituted. Chairman Lee and the management team are expected to comprehensively assess these circumstances and decide on personnel actions regarding these three. If the incumbents are retained, their inside director positions could be extended through next year’s shareholders’ meeting.
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