[Preview of the General Meeting] First Season After Value-Up, Attention on Gaemi Coalition... Foreigners Likely to Raise Their Voices Too

The first regular shareholder meeting (general meeting of shareholders, GMS) season since the implementation of the value-up (corporate value enhancement) program is just around the corner. Amid heightened demands for 'shareholder returns,' this year, shareholder proposals are actively driven mainly by small individual shareholders, or 'ant' shareholders, who have gathered through platforms, rather than activist funds that have led 'shareholder activism' in recent years. There is also a noticeable trend of foreign shareholders actively coming to Korea.

According to the Korea Listed Companies Association on the 10th, as of the end of last month, out of 807 companies listed on the KOSPI with December fiscal year-ends, 414 companies have announced plans to hold shareholder meetings this year. Among them, nearly 70%, or 287 companies, will hold their GMS between the 24th and 28th of this month.

Notably, this year marks the first shareholder meeting season where domestic listed companies’ value-up plans are reflected in the agenda for financial statement approval, making 'shareholder returns' a key theme. According to the proxy advisory firm Sustainvest, since May last year, a total of 100 listed companies have participated in value-up disclosures. Among them, more than half?51 companies?use the total shareholder return ratio, which adds cash dividends to the scale of share buybacks and cancellations, as a core indicator for shareholder returns.

Yoonjung Kim, a researcher at LS Securities, said, "(The 100 companies) account for only about 3% of all listed companies by number, but about 38% by market capitalization," adding, "At this year’s GMS, companies with financial capacity due to value-up programs and activated shareholder activism could become targets for demands to increase dividends. Pressure to expand shareholder returns will intensify." Currently, many companies, including Samsung Electronics, have already decided on share buybacks, cancellations, and dividend increases in anticipation of the GMS.

The so-called 'ant solidarity' gathering is also a key point to watch this shareholder meeting season. While activist funds led aggressive campaigns until last year, this year, the actions of small shareholders united through coalition platforms such as ACT and HeyHolder stand out more. Small shareholders who previously secured acceptance at companies like Emart have already initiated shareholder actions against Millie’s Library, T’way Air, and Lotte Shopping. A major topic is the cumulative voting system, which was deeply imprinted on the public through the Koryo Zinc management rights dispute. The introduction of cumulative voting opens the door for small shareholders to unite and elect directors. Many companies, including Emart, Lotte Shopping, and Coway, plan to handle the agenda for introducing cumulative voting at this year’s GMS.

Along with this, the increasing participation of foreign shareholders is another aspect to watch ahead of this year’s GMS season. Namwoo Lee, chairman of the Korea Corporate Governance Forum, said, "This year, some foreign investors have confirmed plans to come directly to Korea to express opinions and ask questions at shareholder meetings," adding, "This appears to be an international trend where the efforts to assert shareholder rights seen in Japan are crossing over to Korea."

In particular, among foreign shareholders who have decided to come to Korea, there is also a sense of disappointment surrounding the value-up policies that lost momentum amid martial law and impeachment political turmoil. Meanwhile, the passage of the amendment to the Commercial Act aimed at expanding shareholder rights through the National Assembly’s Judiciary Committee is also analyzed as a reason why foreign investors’ attention is focused on Korea.