Largest Personnel Overhaul Since Founding
Shin Yu-yeol Promoted to Executive Vice President at Lotte Holdings
2 out of 10 Executives Replaced, Overall Size Reduced
Shift to Performance-Based Flexible Executive Appointment System
Lotte Group, which was engulfed in rumors of a liquidity crisis, has embarked on management normalization through a large-scale personnel reshuffle in its regular personnel appointments. In this personnel move, Lotte Group replaced 21 out of 60 CEOs, accounting for 36%, marking the first time in the company's history that such a high-intensity personnel overhaul has been carried out. The plan is to place young and capable personnel at the forefront to improve the overall health of the group.
On the 28th, through the 2025 regular executive appointments, Lotte Group appointed a large number of CEOs born in the 1970s. Among the 21 new CEOs, 12 (60%) were born in the 1970s. This move aims to strengthen business competitiveness and accelerate new business initiatives by moving away from seniority-based appointments to performance-centered personnel decisions. The generational shift has accelerated, with eight CEOs aged 60 and above stepping down.
Generational Change Centered on Vice Chairman Shin Yu-yeol
At the center of Lotte's generational change is Shin Yu-yeol, Executive Director of Future Growth Office at Lotte Holdings, born in 1986. Shin was promoted to Vice Chairman in this personnel move. Vice Chairman Shin is a third-generation member of Lotte Group and the eldest son of Chairman Shin Dong-bin. He joined Lotte Group in 2020 as the head of sales in Japan's Lotte and in 2022 worked at Lotte Chemical's Basic Materials Tokyo branch and Lotte Holdings' ESG (Environment, Social, Governance) Management Innovation Office's Future Growth Task Force (TF). Last year, in Japan's Lotte, he held positions as CEO of Lotte Real Estate Co., Ltd., CEO of Financial Co., Ltd., and Head of Corporate Strategy at Lotte Holdings. In Korea's Lotte, he concurrently served as Executive Director of the Future Growth Office at Lotte Holdings and Head of Global Strategy at Lotte Biologics.
Lotte Group evaluated Vice Chairman Shin as the right person to lay the foundation for the group's sustainable growth. The group stated, "Vice Chairman Shin has enhanced his financial expertise through roles such as CEO of Lotte Financial and other investment affiliates," and added, "He will actively lead the successful establishment of new businesses such as bio contract development and manufacturing organization (CDMO) and the global market expansion of core businesses."
Among the major companies appointing CEOs born in the 1970s, Kim Dong-ha, born in 1970 and Senior Managing Director of Corporate Culture Team at Lotte Holdings' HR Innovation Office, was promoted to Executive Director and moved to CEO of Lotte Duty Free. Due to continued sluggish business conditions, Lotte Duty Free declared an emergency management system in June. Lotte Group expects Kim to strongly reform the duty-free organization with his deep understanding of the distribution industry. Kim joined Lotte Confectionery (now Lotte Wellfood) in 1997 and has held positions such as Improvement Office at Lotte Policy Headquarters and Head of Strategic Innovation at Lotte Super. In 2022, he was responsible for personnel and group productivity management as Head of Corporate Culture Team at Lotte Holdings.
Hwang Min-jae, born in 1971, the new CEO of Lotte Chemical Advanced Materials, was promoted from Executive Director and Head of Technology Strategy Headquarters at Lotte Chemical Group HQ to Vice Chairman. Lotte Group judged that these internally verified talents are suitable to lead business innovation in the chemical group and drive organizational change. In addition, there are 12 CEOs born in 1970, including Kim Kyung-yeop, CEO of Lotte Innovate (born in 1970).
Lotte's Liquidity Crisis Rumors... Direct Confrontation with High-Intensity Personnel Overhaul
Lotte Group's strong personnel restructuring reflects a sense of crisis that the group is facing difficulties. Recently, Lotte Group was shaken by rumors of a liquidity crisis, causing instability throughout the group. Subsequently, when Lotte Chemical's corporate bonds violated contract terms, triggering an Event of Default (EOD), rumors about the group's liquidity problems spread rapidly.
Lotte Group tried to calm the situation by stating, "There is absolutely no problem with liquidity," but trust from capital market stakeholders did not recover quickly. Because of this, industry insiders predicted that Lotte Group would move up its regular executive appointments, usually held in mid-December over the past two years, to late November to demonstrate the group's strong will for high-intensity reform.
Lotte Group also significantly reduced the size of its executive team, resulting in a large-scale reshuffle. With this personnel move, 22% of all executives retired, meaning that 2 out of every 10 executives packed their bags. The number of executives was reduced by 13% compared to the end of last year. This scale is even larger than the executive appointments during the pandemic period in 2021.
Especially, many executives aged 60 and above stepped down. Among them, eight CEOs of Lotte affiliates aged 60 (35%) were replaced, and more than 50% of executives aged 60 and above retired.
Lotte Group will switch from regular executive appointments to an ad hoc executive appointment system. With a performance-based personnel policy, the group aims to flexibly respond to uncertain management environments through executive recruitment and replacement. A Lotte Group official explained, "Executive appointments are intended to strengthen fundamental competitiveness by holding strict accountability for performance through bold personnel reforms."
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