KT CEO Koo Hyun-mo's Bold Move: "Competing for Reappointment Against Multiple Candidates"

KT Review Committee Board Conveys "CEO Koo Hyun-mo Suitable for Reappointment" Opinion
Aiming to Block Political Interference and Secure Reappointment Legitimacy

[Asia Economy Reporter Lim Hye-seon] Koo Hyun-mo, CEO of KT seeking reappointment, has made a bold move to secure legitimacy. Although Koo received a qualification approval from the CEO Candidate Screening Committee, he voluntarily chose to compete against other candidates. Koo will run as candidate number 1 in the upcoming KT CEO election.

KT Screening Committee: "Qualified for Reappointment," Koo Hyun-mo: "I Will Compete with Multiple Candidates"

On the 13th, KT’s screening committee reported to the board that Koo is qualified for reappointment. However, instead of recommending himself as the sole candidate, Koo conveyed to the board his intention to compete against multiple candidates. The board decided to conduct additional screening and is currently coordinating the method and schedule for selecting multiple candidates. It is expected that the Governance Committee and the screening committee will recommend candidates rather than through an open recruitment process.

The Governance Committee can receive director recommendations to form a pool of outside CEO candidates, commission investigations to professional agencies, or form a personnel advisory group. According to the articles of incorporation, the next CEO candidate must be decided at least three months before the regular shareholders' meeting, so the candidate selection process must be completed within this year. The next CEO will be finalized at the regular shareholders' meeting.

The "primary election card" is interpreted as Koo’s expression of confidence to block political interference and rumors remotely and face competition head-on based on merit. According to KT, Koo considered concerns raised by major shareholders regarding the governance of widely held companies (companies without a controlling shareholder like KT). The major shareholder refers to the National Pension Service, which holds 10.35% of KT’s shares and is the largest shareholder. It remains uncertain whether the National Pension Service will support Koo at the shareholders' meeting.

Recently, Kim Tae-hyun, chairman of the National Pension Service, pointed out, "In widely held companies, issues arise regarding preferential screening of incumbents and the acceptance of external personnel during CEO or chairman appointments and reappointments." Although he did not mention any specific company, his remarks are interpreted as referring to KT. Additionally, the Fair Trade Commission’s investigation into KT’s security affiliate KT Telecop for suspected unfair internal transactions could also act as a negative factor. This is seen as an effort to dispel external negative views and concerns and to gain recognition for the legitimacy of reappointment.

Business Community Predicts "Koo Holds Advantage in Candidate Competition"

Since KT was privatized in 2002, four people including Koo have served as CEO. Among them, former presidents Nam Joong-soo, Lee Seok-chae, and Chairman Hwang Chang-gyu succeeded in reappointment, but only Hwang completed a second term. Two of them resigned amid prosecution investigations during their second terms. Since the regime change, only Chairman Hwang has completed a reappointment term.

The business community expects Koo to hold an advantage in the candidate competition. Since taking office, Koo has been credited with shedding KT’s "telephone company" image and transforming it into a "Digico (digital platform company)," thereby increasing KT’s corporate value. He strengthened the business-to-business (B2B) sector based on technologies such as artificial intelligence (AI), big data, and cloud computing. Performance and stock prices have proven this.

KT’s standalone operating profit increased by 21.6%, from 878.2 billion KRW in 2020, right after Koo’s appointment, to 1.0682 trillion KRW last year. The securities industry estimates this year’s operating profit will reach 1.211 trillion KRW. KT’s stock price closed at 37,600 KRW on the 2nd, a 91% increase compared to 19,700 KRW at the time of Koo’s inauguration on March 30, 2020. KT’s market capitalization surpassed 10 trillion KRW in August for the first time in over nine years since 2013.

Koo reflected, "Is this just a change over two to three years, or can it structurally change to create new businesses and transform into a new type of business operator? From that perspective, it is still difficult to say that structural and sustainability have been secured, which is why I am considering reappointment." KT’s labor union also supported Koo’s reappointment.

In a statement on the 6th, the KT labor union said, "We are confident that KT’s future vision, which is now on track, can bear successful fruit only if Koo leads KT stably." They added, "What is most noteworthy is that the achievements were not made by threatening employment stability through workforce restructuring or asset sales pushed by past parachute CEOs for short-term results, but through fundamental business restructuring."

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