Hive, Shareholder Proposal Campaign..."Lee Soo-man Delegation, Not True"

HYBE has effectively failed in its public tender offer to acquire a small shareholder stake in SM Entertainment and has launched an all-out effort to secure voting rights from minority shareholders.

On the 2nd, HYBE opened a shareholder proposal campaign page called ‘SM with HYBE.’ The website features videos where HYBE CLO (Chief Legal Officer) Jung Jin-soo and HYBE America CEO Lee Jae-sang, both candidates for SM internal director positions, personally explain the shareholder proposal.

HYBE has set up an electronic proxy page within the campaign website to allow individual shareholders to easily delegate their voting rights. The intention is to enable anyone to exercise their shareholder rights smoothly, regardless of the number of shares held. SM’s regular shareholders’ meeting is scheduled for the 31st.

Candidate Jung Jin-soo emphasized in the video titled ‘Explanation and Background of the Shareholder Proposal’ that there is no relationship between former SM Chief Producer Lee Soo-man and HYBE. He stated, “Some claim that HYBE’s shareholder proposal is essentially Lee Soo-man’s proposal because HYBE has been delegated Lee Soo-man’s voting rights, but this is completely untrue.”

He added, “Those who continue to make such claims are actually the current management who caused management issues based on SM’s governance problems and are merely trying to shift their responsibility.”

Candidate Lee Jae-sang, in the video titled ‘Direction of SM’s Growth and Shareholder Return Policy,’ said that SM’s ‘SM 3.0’ strategy could be more effective if carried out together with HYBE.

He cited ▲multi-label management experience successfully running acquired labels (Pledis Entertainment), newly established labels (ADOR), and existing labels (Big Hit Music) ▲diversification and commercialization capabilities of IP content that raised secondary IP business revenue share to 50% ▲global business infrastructure including an overwhelming network in the North American market, explaining that HYBE has already successfully operated key businesses of SM 3.0.

He also proposed a shareholder return policy targeting SM’s recent promise of a dividend of 1,200 KRW per share through a shareholder letter. Candidate Lee Jae-sang said, “We plan to introduce a compensation system that maintains a 30% dividend payout ratio of SM’s net income over the next three years while balancing growth and shareholder value enhancement.”

HYBE explained that this campaign was planned based on the judgment that SM’s current management is seriously infringing on shareholder value.

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