Kumho Petrochemical Enters Electric Vehicle Business and Expands Dividends 2.8 Times... 'New Vision' Agenda for General Meeting of Shareholders Revealed

Confirmation of AGM Agenda and Posting of 'Mid- to Long-Term Growth Strategy' on Website
Distinctive Outside Director Candidates Highlight Independence and Expertise

[Asia Economy Reporter Hwang Yoon-joo] Kumho Petrochemical has announced a vision to expand dividends by 2.8 times from the previous amount (KRW 1,500 per common share) and to enter new businesses such as electric vehicle batteries. It also recommended outside director candidates who strengthen gender diversity and expertise, including former Constitutional Court Justice Lee Jung-mi.

On the 9th, Kumho Petrochemical held a board meeting and finalized the agenda for the 44th regular general shareholders' meeting, disclosing the details. The proposed agenda items were confirmed as follows: ▲ Approval of financial statements and profit distribution ▲ Partial amendment of the articles of incorporation ▲ Appointment of inside directors ▲ Appointment of outside directors and audit committee members ▲ Appointment of audit committee members ▲ Approval of director remuneration limits.

Among separate shareholder proposals, except for the profit distribution (dividend) related parts, the remaining items (amendment of articles of incorporation, inside directors, outside directors, audit committee members) were all submitted together with the company’s proposals. Regarding profit distribution (dividends), the legality of the shareholder proposal is currently under court review, and whether to include this agenda item will be decided later by the court.

Looking at each agenda item in detail: for the approval of financial statements and profit distribution, the dividend per common share is KRW 4,200 (KRW 4,000 for major shareholders), and KRW 450 per preferred share, totaling KRW 115.8 billion. Considering the significant improvement in 2020 performance, the total dividend increased by approximately 180% compared to the previous year, and the differential dividend policy for major shareholders, which has been continuously pursued for five years, was expanded by 33% compared to the previous year. Furthermore, the company plans to maintain a dividend payout ratio of 20-25% based on separate financial statements, which is higher than the previous dividend policy, for the next 2-3 years, and to pursue a dividend increase policy aligned with improved cash flow, aside from strategic investments for growth.

Regarding the partial amendment of the articles of incorporation, governance improvement measures were prepared to establish a foundation for sustainable management and social value creation. The company’s proposal includes key measures to ensure shareholder value-centered board operations by separating the roles of CEO and board chair to enhance the board’s independence, transparency, and rationality. It also plans to establish an ESG Committee to manage ESG (Environmental, Social, Governance) management performance, an Internal Transactions Committee to enhance transparency of transactions between affiliates and related parties and monitor conflicts of interest, and a Compensation Committee to ensure objectivity and transparency in the director remuneration decision process. These committees will be operated mainly by outside directors to ensure practical independence. Meanwhile, the shareholder proposal includes appointing the board chair from among outside directors and establishing the Internal Transactions Committee and Compensation Committee.

For the appointment of inside directors, a board composition plan was prepared considering a more proactive ESG management strategy and enhancement of board expertise. The company proposed Baek Jong-hoon, Executive Director and Head of Sales Division at Kumho Petrochemical, as a candidate. Baek Jong-hoon joined Kumho Shell Chemical in 1988 and has worked in R&D and sales at Kumho P&B Chemical, among others. Based on his job experience and expertise in sales, he is expected to play an important role in strengthening the competitiveness of the core business and establishing a sustainable growth foundation. Meanwhile, the shareholder proposal recommended Park Cheol-wan, Executive Director of Overseas Rubber Sales at Kumho Petrochemical.

Regarding the appointment of outside directors and audit committee members, candidates were selected and recommended by the Outside Director Candidate Recommendation Committee, composed entirely of outside directors, after comprehensively reviewing expertise in finance, ESG, accounting, law, and diversity in gender and composition. The company proposed four candidates: Lee Jung-mi, Senior Counsel at Law Firm Logos; Park Soon-ae, Professor at Seoul National University Graduate School of Public Administration; Choi Do-sung, Chair Professor at Gachon University; and Hwang Yi-seok, Professor at Seoul National University Business School. Among them, Choi Do-sung and Hwang Yi-seok are also candidates for the audit committee. Meanwhile, the shareholder proposal recommended four candidates: Lee Byung-nam, former head of Boston Consulting Group Korea Office; Min John K, foreign lawyer at Dentons Lee; Cho Yong-beom, Head of Facebook Southeast Asia; and Choi Jong-hyun, Professor of Environmental Engineering at Ewha Womans University College of Engineering. Among them, Lee Byung-nam and Min John K are also candidates for the audit committee.

Additionally, the company announced that it posted detailed and actionable 'New Vision' for continuous improvement of shareholder value, aiming for KRW 9 trillion in sales by 2025 as a mid-to-long-term growth strategy, along with explanatory materials on the recent acquisition of Kumho Resort, on the Kumho Petrochemical website under 'Mid-to-Long-Term Growth Strategy for Sustainable Management' to help shareholders understand the agenda.

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