Korea Corporate Governance Service Recommends "Support for Cho Won-tae's Reappointment as Inside Director of Hanjin Kal"

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] The Korea Corporate Governance Service (KCGS), the proxy advisory firm for the National Pension Service, has recommended approval of Chairman Cho Won-tae's reappointment as an inside director at Hanjin KAL's regular shareholders' meeting, thereby supporting Hanjin KAL.

According to the financial investment industry on the 13th, KCGS recently stated in its shareholder meeting agenda report sent to clients that "the board's proposal is judged to better align with enhancing the company's long-term shareholder value, and thus recommends a vote in favor."

Regarding the shareholder proposal candidates from the so-called 'three-party coalition,' KCGS recommended abstention. At this regular shareholders' meeting, the three-party coalition consisting of KCGI, Bando Construction, and former Korean Air Vice President Cho Hyun-ah opposes Chairman Cho's reappointment as an inside director. They have also nominated seven director candidates themselves, signaling a proxy battle at the meeting.

After analyzing the proposals from both sides, KCGS stated, "None of the director candidates recommended by the board or the three-party coalition fall under disqualification criteria for inside or outside directors as defined in KCGS's proxy voting guidelines," and added, "Since a proxy battle is ongoing between the board and the shareholder proposal, it is highly likely that only the proposals presented by either the board or the three-party coalition will be approved."

Furthermore, KCGS noted, "The Hanjin KAL board has demonstrated a willingness to improve governance and financials as demanded by external shareholders and has been recognized for efforts to enhance long-term shareholder value through board resolutions." It also pointed out, "In the case of the three-party coalition, the interests of its constituent members are unclear, and although they advocate for the introduction of a professional management system, there is no particular reason to believe that the expertise of their proposed candidates is superior to that of the board's candidates." KCGS concluded that the candidates proposed by the board are deemed more suitable for enhancing Hanjin KAL's long-term shareholder value.

Regarding the Hanjin KAL management rights dispute, KCGS's support for the board side this time is analyzed as giving Chairman Cho Won-tae's camp a somewhat advantageous position.

Domestic proxy advisory firms Sustainvest, Daishin Governance Research Institute, and Center for Good Corporate Governance (CGCG), as well as foreign firms ISS and Glass Lewis, are also expected to send reports containing their recommendations to clients soon.

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