Three Reasons Supporting the Reappointment of KT CEO Koo Hyun-mo

'KT Man' Grown at KT
Long-Awaited Market Cap of 10 Trillion Achieved
Union Support... No Alternative

As KT begins the process of appointing a new CEO, the business community is keenly watching whether current CEO Koo Hyun-mo will be reappointed or if a third party will emerge. The photo shows CEO Koo Hyun-mo attending the launch ceremony of the "Digital Citizen One Team" held on the 7th at Sofitel Ambassador Seoul in Songpa-gu, Seoul. Photo by Koo Hyun-mo

[Asia Economy Reporter Cha Min-young] As KT begins the process of appointing a new CEO, the business community is keenly watching whether current KT CEO Koo Hyun-mo’s reappointment will be confirmed or if a third-party candidate will emerge. Although the CEO Candidate Screening Committee judged Koo to be "qualified" for reappointment, Koo declared, "I will compete against multiple candidates," positioning himself for a competitive election. Despite Koo’s transformation of KT into a 'Digico (Digital Platform Company) KT' over the past three years since his inauguration, it remains uncertain whether the position of 'KT CEO' can be free from political external pressures. Here are three reasons why Koo is likely to be reappointed.

"A symbol of the power of a KT veteran with over 30 years of experience"

Koo first joined KT in 1987 as a researcher at the KT Economic Management Research Institute. Over approximately 33 years at KT, he held key positions including head of management strategy, chief of staff, and president of management support before ascending to CEO in March 2020. He has also accumulated many internal achievements. In 2008, he led the acquisition of Nasmedia, a digital media rep (internet media advertising agency), and in 2009, he spearheaded the merger between KT and KTF, which was the biggest issue at the time. During his candidacy for CEO, he served as head of the Customer & Media Division, contributing to solidifying KT’s leading position in wired network sectors such as IPTV and internet.

Koo also has a close relationship with former Chairman Hwang Chang-gyu. After Hwang, who came from Samsung Group, took office, Koo served as his first chief of staff. In the CEO election held at the end of 2019 after Hwang’s resignation, Koo faced fierce competition with a ratio of 37 to 1 but no one surpassed him. This was why he was labeled a "leading candidate" at the time. Koo is the first internal appointment as KT CEO since Nam Joong-soo took office in 2005. Since then, KT has been led for 12 years by external figures such as former Chairman Lee Seok-chae, a former bureaucrat, and former Chairman Hwang Chang-gyu, who was Samsung Electronics’ head of technology.

"Achieved the long-awaited market capitalization of 10 trillion won after inauguration"

Since his appointment as CEO in March 2020, Koo has swiftly pursued change under the catchphrase "Digico KT." The main focus was on moving beyond telecommunications. He strengthened the B2B sector with an emphasis on artificial intelligence (AI) technology and digital transformation (DX). He also secured significant mergers and acquisitions (M&A) achievements, including the acquisition of HCN, a Hyundai Department Store affiliate, through subsidiary KT Skylife. On the 8th of last month, Koo expressed his intention to seek reappointment, and on the 17th, he took the stage at the "AI Development Strategy Press Conference" to announce three major development strategies: "commercialization of super-large AI, AI infrastructure innovation, and nurturing future AI talent." He also broke the prejudice that "telecom companies cannot succeed in media business." Centered on KT Studio Genie, a mid-tier holding company, KT achieved success in the media and content sector, including the hit drama "Extraordinary Attorney Woo."

KT’s revenue for the first half of 2022 totaled 12.5899 trillion won, with an operating profit of 1.0858 trillion won. This revenue marks the highest ever for the first half of a year. The company’s value also rose accordingly. The stock price, which was 26,700 won (closing price on January 2, 2020) just before Koo’s appointment, closed at 36,000 won on December 26. Since Koo took the helm, KT’s stock price has risen about 35%. Market capitalization currently stands at approximately 9.4 trillion won, nearing 10 trillion won. In August, the market cap briefly surpassed the 10 trillion won mark. Compared to competitors, KT’s growth rate is remarkable. During the same period, SK Telecom’s adjusted stock price, considering stock splits, rose 22%, while LG Uplus fell 14.8%. Kim Hong-sik, a researcher at Hana Securities, noted, "Although KT has entered a CEO election system, considering performance and stock price results, the reappointment of current CEO Koo Hyun-mo is highly likely," adding, "After reappointment, Koo is expected to actively pursue corporate governance restructuring."

"Supported by the union, with no alternatives"

The voices of KT employees toward Koo are also positive. The first union, led by Chairman Choi Chang-bok and comprising 16,000 KT employees, recently officially supported Koo’s reappointment. On the 6th of this month, Chairman Choi posted a message titled "A Letter to Union Members Regarding CEO Reappointment" on the KT Labor Union website, expressing support for reappointment. This was a counter to the second union, KT Saenozu, which opposed Koo’s reappointment. Inside the company, Koo’s rational management style has also received favorable reviews. A KT official said, "Koo gives reasonable instructions without overextending, so his reputation among employees is not bad," adding, "(Other candidates) will find it difficult."

The lack of alternatives also increases the likelihood of Koo’s reappointment. Even if a new candidate is brought in through external recommendations, it is expected to be difficult to surpass Koo’s three-year achievements. Prominent external candidates mentioned include former KTF Vice President Kim Ki-yeol, former KT President Lim Heon-moon, former Samsung SDS CEO Hong Won-pyo, former KT Networks Network Engineering Division Head Lee Kyung-soo, and former KT Enterprise Division President Park Yoon-young. Former People Power Party lawmaker Kim Sung-tae, who served as IT special advisor and ICT Korea Promotion Headquarters head during President Yoon Seok-youl’s transition team, is also mentioned. However, there is criticism that appointing older, past-generation figures as KT’s head?who must lead competition in the fast-changing ICT industry?is inappropriate, making the outcome difficult to predict.

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