Kwon Kwang-seok's Next Woori Bank President Term Set as '1+2' System... Preventing a Second KB Incident?

Woori Financial Group Nomination Committee Guarantees Kwon's 1-Year Term, Decides on 2-Year Extension
Reflects Intent to Prevent 'KB Incident' Risks from Direct Clash Between Holding Company Chairman and Bank President

[Asia Economy Reporter Kwon Haeyoung] The term of Kwon Gwangseok, the nominee for CEO of Woori Bank, has been set at one year. While the typical term for CEOs of commercial banks is two or three years, the Woori Financial Group Executive Candidate Recommendation Committee decided to adopt a '1+2' system for Kwon's term. This is interpreted as reflecting the intention of Sohn Tae-seung, Chairman of Woori Financial Group, to prevent the CEO's authority from becoming too powerful.

According to financial circles on the 13th, Kwon's term will be one year starting after the March shareholders' meeting.

A Woori Financial Group recommendation committee official said, "We decided to set Kwon's term at one year with a possible two-year extension later, following a '1+2' system," adding, "There is no special significance. The decision was made considering various internal circumstances."

Setting the CEO's term at one year is highly unusual. Typically, the holding company's chairman serves a three-year term, while the bank CEO and other subsidiary heads follow a '2+1' system?two years initially with a one-year extension?which is customary in the financial sector.

Some interpret this as Chairman Sohn's strategy to check the growing power of the bank CEO. The bank accounts for over 90% of Woori Financial Group's total assets and profits. The emergence of a bank CEO with more power than the holding company chairman would be the worst-case scenario for Chairman Sohn.

A financial industry insider said, "I understand that some outside directors, including those from IMM Private Equity, strongly opposed appointing Kim Jeong-gi, current Vice President of Woori Financial and close to Chairman Sohn, as the next CEO," adding, "It seems that Sohn and the outside directors reached a consensus by appointing Kwon but limiting his term and authority."

Initially, Chairman Sohn supported Kim Jeong-gi, who was head of the Woori Bank division and is now Vice President of Woori Financial, as the next CEO. However, after Sohn filed an administrative lawsuit contesting the heavy disciplinary action from the Financial Supervisory Service over the overseas interest rate-linked derivative-linked fund (DLF) incident, some outside directors strongly opposed appointing a CEO close to Sohn. Limiting Kwon's term to one year is seen as a way to prevent future conflicts between the holding company and the bank, representing a compromise between Sohn and the outside directors.

Another financial insider said, "The KB incident in 2014, which arose over the replacement of the mainframe computer, was a case of direct conflict between the holding company chairman and the bank CEO," adding, "Since the bank's share in Woori Financial Group is absolute, limiting the CEO's term is interpreted as an intention to nip potential conflicts between the holding company and the bank in the bud."

A Woori Financial Group official said, "Right now, the urgent task is to stabilize the unsettled organization, so conflicts between the holding company and the bank are out of the question," and added, "Kwon's term will naturally be extended by two years after serving as CEO for one year."

This content was produced with the assistance of AI translation services.