Seo Jung-jin "Sorry to Shareholders" · Ki Woo-sung "Will Accept Minimum Wage"... Celltrion Bows Amid Stock Price Drop (Comprehensive)

On the morning of the 25th, the 31st Celltrion Annual General Meeting of Shareholders is being held in Songdo, Yeonsu-gu, Incheon. (Photo by Celltrion)

[Asia Economy Reporter Lee Chun-hee] Seo Jung-jin, Honorary Chairman of Celltrion, recently bowed his head to shareholders, apologizing for the recent stock price decline. Ki Woo-sung, Vice Chairman and CEO of Celltrion, also announced that he would receive only the minimum wage until the stock price recovers to a certain level, sharing the pain of the shareholders.

On the morning of the 25th, at the 31st regular shareholders' meeting of Celltrion held in Songdo, Yeonsu-gu, Incheon, Honorary Chairman Seo said, "As an honorary chairman and a major shareholder, I sincerely apologize for unintentionally causing much hurt to the shareholders due to the current undervaluation of the company's value."

On that day, Honorary Chairman Seo made a surprise appearance without prior notice. Watching the shareholders' meeting online, he requested to speak and was connected via phone.

Honorary Chairman Seo emphasized, "In fact, there are not many ways for the company to raise its stock price. We must drive the stock price through performance. Although our employees had a difficult time last year, I believe they will do their best to achieve better results this year."

Seo Jung-jin, Honorary Chairman of Celltrion

Regarding the delay in the merger of the three companies?Celltrion, Celltrion Healthcare, and Celltrion Pharm?which has been continuously pursued, Honorary Chairman Seo actively denied suspicions that the succession process involving his two sons, Seo Jin-seok, Chairman of the Celltrion Board, and Seo Jun-seok, Chairman of the Celltrion Healthcare Board, was related.

He stated, "One of the things that makes Celltrion different from other companies is that all the group's shares are mine, and there are no shares owned by my family." He emphasized, "If I die, Celltrion will almost become a state-owned enterprise under the inheritance tax law." Regarding this, Honorary Chairman Seo added, "I do not want to engage in any illegal or irregular activities. Even if it means becoming a state-owned enterprise, I will not make any prior gifts to my children."

Honorary Chairman Seo also expressed his feelings about the recent accounting audit issue. He said, "Professional managers have no reason to engage in window dressing, and I asked why I would want to allow it, but they did not listen." However, he mentioned that he 'endured and let it pass' to make the three-company merger successful. He added, "If we appeal, we cannot proceed with the merger until the Supreme Court's judgment, so even if it is unfair and disgraceful, I told the employees to endure and move forward."

On the morning of the 25th, the 31st Celltrion Annual General Meeting of Shareholders is being held in Songdo, Yeonsu-gu, Incheon. (Photo by Celltrion)

Ki Woo-sung, CEO of Celltrion, also stated at the shareholders' meeting that "As a manager, I believe I bear some responsibility for the results that have caused shareholders to suffer," and expressed his intention to receive only the minimum wage until the stock price recovers to a certain level.

This decision has been made consecutively as a way to share the shareholders' losses caused by recent negative factors for each company and the decline in stock prices due to worsening macroeconomic conditions. Last month, Namgung Hoon, the designated CEO of Kakao, announced, "I will withhold my salary and incentives until Kakao's stock price reaches 150,000 won," and "I will receive only the statutory minimum wage until that day." The day before, Shin Won-geun, the designated CEO of Kakao Pay, also declared, "I will not receive any salary, incentives, or other compensation until the stock price reaches 200,000 won and will receive only the minimum wage."

At the Celltrion shareholders' meeting that day, a shareholder mentioned these decisions by the designated CEOs Nam and Shin and said, "I believe that CEO Ki and Chairman Seo Jin-seok of the Board should work receiving only the minimum wage until the stock price reaches 350,000 won, and once it exceeds that, they should retroactively receive unpaid salaries as a responsible management attitude," sparking discussion. After this shareholder's remark ended, other shareholders attending the meeting cheered and responded enthusiastically.

However, CEO Ki initially responded to this demand by saying, "I agree with the symbolic meaning," but avoided giving a direct answer, stating, "I will consider it deeply." Nevertheless, the shareholder reiterated, "Please share the pain of the shareholders and announce that you will work receiving only the minimum wage as a responsible management attitude." In response, CEO Ki said, "Since the shareholders are suffering, I agree with the proposal."

During the meeting, a debate also arose over the agenda to grant stock options to employees. Shareholders pointed out that although Celltrion has been continuously buying back its own shares recently, it has not disclosed specific plans such as share cancellation and demanded that stock options be granted using treasury shares.

CEO Ki readily accepted this, saying, "Those who receive stock options this year will use treasury shares," and "During my tenure as CEO, this is reflected in the regulations."

However, he also stated that share cancellation is not being considered. CEO Ki explained, "Even if treasury shares are canceled, the stock price rebounds and then the boosting effect disappears," and "If treasury shares are used for M&A, it is better to use them as resources for another 'quantum jump.'" He explained that the company is preparing treasury shares with a focus on long-term effects as a growth engine.

Ki Woo-sung, Vice Chairman and CEO of Celltrion

After the regular shareholders' meeting, during the Q&A session, various questions and answers were exchanged regarding company management and vision.

During this process, CEO Ki hinted at the intention to halt the plan to establish a biopharmaceutical production plant originally planned in Wuhan, China. He said, "We are preparing according to the changed environment," and "I informed the Chinese side that we need to fundamentally reconsider the feasibility."

Originally, Celltrion announced a plan in 2020 to establish a 120,000-liter scale plant through an agreement with Wuhan City. The plan was to actively explore the Chinese market through this. However, the related business has been completely suspended since the COVID-19 pandemic broke out centered in Wuhan.

Regarding this decision, CEO Ki also mentioned political issues. He explained, "Looking at the biosimilar development environment, places like Wuxi Biologics are building large-scale production facilities, so we need to reconsider," and "There are also limitations in transferring products made in China to the U.S. due to political issues," indicating that he sees limits in the current China business.

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