Koo Hyun-mo 'Sole KT CEO Candidate'... National Pension Service as a Variable

28 Candidates Including CEO Koo Hyun-mo Compete
Recognized for Achievements and Future Vision
Satisfying Both Justification and Practicality

Candidate List Kept Confidential
Concerns Raised Over 국민연금 Gongjeongseong Deficiency
March Next Year Shareholders' Meeting Vote Battle Expected

[Asia Economy Reporter Cha Min-young] On the 28th, KT's board of directors, after reviewing the internal and external CEO candidates, selected the current KT CEO and President, Koo Hyun-mo, as the final candidate. It is said that there were no significant objections within the board considering Koo's past achievements and vision. Although the prevailing analysis is that his reappointment has been virtually confirmed, the National Pension Service (NPS), the largest shareholder, expressed opposition citing a "lack of fairness," increasing uncertainty. Ultimately, it is expected that a vote will be held on Koo's reappointment at the March shareholders' meeting where the CEO appointment proposal will be presented.

Both Justification and Practicality Were with Koo Hyun-mo

According to KT and multiple business insiders, KT's board highly evaluated Koo's achievements over the past three years and his vision for future growth, selecting him as the final candidate. It is rumored that competition with other candidates was difficult given the forecast that KT's service sector revenue would surpass 16 trillion won for the first time and that the stock price rose by 90% during Koo's tenure. Particularly, his leadership in driving change and innovation across the KT Group, which had a strong "telephone exchange" image, also contributed to his selection as the final candidate.

The board reportedly agreed that Koo's future growth vision, including accelerating the transition to a 'Digico (digital platform company),' execution plans, sustainable growth potential, and strategies for attracting top talent, aligns with the direction KT should pursue. They also judged that there were no legal issues related to Koo personally.

KT stated in response to the NPS's procedural fairness dispute, "We fairly evaluated a total of 28 internal and external candidates." According to KT, the CEO Candidate Review Committee conducted five priority screenings for Koo's reappointment. Subsequently, in the primary election process, a total of 27 candidates?13 internal and 14 external?were reviewed seven times.

National Pension Service Opposes 'Opaque Reappointment,' Will Exercise Voting Rights

The National Pension Service, which has emphasized "fair procedures," issued an official statement about three hours after KT's decision was announced. Seo Won-joo, the new head of the Fund Management Headquarters (Fund Director), said immediately after the final candidate announcement, "KT's board confirmed the incumbent CEO as the final candidate," adding, "The candidate selection did not meet the basic principle of a transparent and fair primary election process." He further stated, "We will fully consider these matters in the future when exercising voting rights and fulfilling fiduciary responsibilities."

In the market, there are criticisms that the process was an opaque appointment unbefitting the name "National Enterprise KT." KT remained silent about the procedures and schedule after Koo himself volunteered for the "primary election" structure. The final candidate was confirmed two weeks later. The final candidate list was not disclosed citing personal information protection. In contrast, during the 2019 primary election to find a successor to former Chairman Hwang Chang-gyu, external recruitment and screening schedules were fully disclosed. At that time, external recruitment lasted two weeks, and the primary election had a competition rate of 37 to 1, with 21 external candidates.

A senior official in the telecommunications industry, Mr. Lee, said, "There was a self-nominated candidate, but I was not informed in detail about how the intermediate procedures were conducted," adding, "I was not able to confirm whether I was included in the final candidate list, whether my profile was well conveyed to the board, or whether my future vision was well explained." A Democratic Party official also said, "Koo emphasized that he proposed the primary election first, but instead of rushing to a conclusion, external recruitment should have been properly conducted," and added, "In keeping with the name of a national enterprise, the candidate list should have been disclosed and the process made more transparent."

"KT Is a Private Company, National Pension Service's Behavior Is Excessive" Criticism Also Raised

There are also criticisms that external intervention is excessive in the process of selecting KT's internal CEO, as KT marks its 20th anniversary of privatization this year. Professor Cho Myung-hyun of Korea University, former president of the Korea Corporate Governance Service, said, "Privatized public enterprises clearly lack a definitive owner, so management and supervision can be inadequate," adding, "While the National Pension Service can sufficiently point out ambiguities in KT's CEO appointment process as a shareholder, it must first maintain political independence and clarify standards for exercising voting rights."

Ultimately, Koo's reappointment issue is expected to be decided at the March shareholders' meeting next year. Although the opposition from the largest shareholder, the National Pension Service (with a 10.35% stake), is burdensome for KT, the market predicts KT's victory. Friendly shareholders such as Hyundai Motor Group (7.79%) and Shinhan Bank (5.47%) are likely to side with KT based on corporate interests. Small shareholders account for nearly 60%, which favors the company. Typically, small shareholders are likely to delegate their voting rights due to difficulties in attending directly.

Variables remain even after the March shareholders' meeting. Since KT's privatization in 2002, four CEOs including Koo have served. Among them, former Presidents Nam Joong-soo, Lee Seok-chae, and Hwang Chang-gyu succeeded in reappointment, but only Hwang Chang-gyu completed a second term. Two of them resigned amid prosecution investigations during their second terms. Since the regime change, Hwang is the only one who completed a reappointment term.

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