31% of Companies Say Passing Agenda at General Meeting Difficult if National Pension Opposes

This Year's Key Agenda Items at the General Meeting Include Shareholder Returns, Articles of Incorporation Amendments, and Director Appointments

[Asia Economy Reporter Park Sun-mi] The main agenda items for this year's regular shareholder meetings of listed companies include shareholder return policies such as dividend expansion and share buybacks, amendments to the articles of incorporation, and the appointment or dismissal of directors. Since the government announced plans to introduce shareholder representative lawsuits by the National Pension Service (NPS) at the end of last year, the influence of the NPS on companies is expected to increase at this year's shareholder meetings.

On the 27th, the Federation of Korean Industries (FKI) announced the results of a survey on difficulties faced at shareholder meetings of the top 500 companies by sales, conducted by the market research firm Mono Research ahead of the regular shareholder meetings in March. The survey revealed that the main agenda items were shareholder return policies such as dividend expansion or share buybacks (23.1%). Following these were approval of amendments to the articles of incorporation (19.9%), appointment or dismissal of (outside) directors (18.6%), and separate election of auditors and audit committee members (12.7%).

When asked whether the passage of an agenda item would be difficult if the NPS publicly announced opposition to it in advance, 31.2% of all respondent companies answered ‘Yes.’

This means that about three out of ten companies surveyed expect it to be difficult for agenda items opposed by the NPS to pass at the shareholder meetings. Among companies with sales exceeding 1 trillion won, which are relatively large in scale, 43.5% responded that ‘if the NPS publicly announces opposition in advance, the agenda’s passage will be difficult,’ indicating that these companies feel a greater influence from the NPS.

When asked who they feel the greatest burden from regarding shareholder proposals (excluding direct parties to management disputes) ahead of the shareholder meetings, the answers were NPS (24.7%), institutional investors (24.0%), foreign institutional investors (15.6%), and small shareholder coalitions (15.6%), in that order. Additionally, 24.0% of companies responded that requests for data or inquiries from the NPS have ‘increased’ compared to previous years, which is more than six times higher than those who said it has ‘decreased’ (3.9%).

Meanwhile, when asked what institutional improvements are necessary for the smooth holding of shareholder meetings, 44.8% chose ‘simplification of various disclosure items and procedures scattered across the Commercial Act, the Fair Trade Act, and the Capital Markets Act,’ and 35.1% selected ‘removal of the 3% voting rights restriction or reinstatement of shadow voting.’

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