Choi Tae-won Emphasizes 'Crisis'... How Did SK's Key Executives Perform in First Half Management?

Financial Story Promotion Responsibility
Mid-Year Report Card of Key Executives

Choi Tae-won, chairman of SK Group, has raised the management theme of 'crisis and opportunity,' leaving the core executives preparing for the first half earnings announcement with mixed feelings. One year after rising to the position of 'second largest conglomerate,' major affiliates are experiencing sluggish sales, and some are expected to post losses amounting to trillions of won. The stock price, an important evaluation criterion in assessing executives' management performance, is also plummeting.

[Image source=Yonhap News]

At last month's expanded management meeting, Chairman Choi said, "We are living in a global transition period where it is difficult to survive with past management methods alone. To respond to unexpected crisis variables as well as opportunity factors, we must advance scenario planning management."

This directive came at a time when the group is shifting from its traditional core businesses of refining, petrochemicals, and telecommunications, which are experiencing growth stagnation, to new growth engines such as semiconductors and batteries, prompting the entire group to pay close attention.

Vice chairman-level CEOs are on high alert. Due to external factors such as the US-China conflict, they have delivered unsatisfactory results during the first half of the year. With the increased weight of stock prices in CEO evaluations, managing stock prices has become urgent. Especially since last year's group personnel decisions favored stability, there are already forecasts of significant changes by the end of this year, heightening tension.

Cho Dae-sik, chairman of the SK Supex Council (hereafter the Council), regarded as the 'second-in-command' of the group, boasts solid achievements in leading the group's structural reform. Leading the Council, which includes CEOs and executives of affiliates, he has devoted himself to spreading the financial story and social value emphasized by Chairman Choi. The financial story is a strategy that accelerates growth by gaining trust and empathy from customers, investors, and the market through goals and concrete execution plans that the market finds attractive, beyond just financial performance.

Born in 1960, the same year as Chairman Choi, Chairman Cho has successfully secured a fourth consecutive term since becoming Council chairman in 2017. At that time, he was a key figure in generational change, but now enough time has passed that he himself may become the subject of such change. Additionally, judicial risks related to former SK Networks chairman Choi Seon-won’s embezzlement have not been fully resolved. Chairman Cho is accused of conspiring in the case where former SK Networks chairman Choi Seon-won was indicted on charges of embezzlement and breach of trust amounting to about 220 billion won. Although acquitted in the first trial, the appeal is ongoing.

Kim Jun, vice chairman of SK Innovation, born in 1961, is leading the transition from fossil fuel-centered businesses to green (eco-friendly) businesses. Through the 'Carbon to Green' strategy, Vice Chairman Kim plans to increase the proportion of green assets from 30% in 2020 to 70% by 2025.

Although SK On, which operates the electric vehicle battery business, has succeeded in large-scale fundraising, poor first-half performance in refining and other sectors remains a problem. Recently, a 1.6 trillion won rights offering has been underway, but sluggish stock prices are holding back progress.

Vice Chairman Yoo Jung-joon stepped down as CEO of SK E&S this year to focus more on North American business. The importance of the North American region is growing in the so-called 'BBS' businesses?battery, semiconductor, and bio. As he himself stated, "The goal of the US business is contribution to carbon neutrality rather than profit," he is playing a crucial role in the group's carbon neutrality efforts. However, there are limitations in achieving tangible short-term results.

SK REITs (SK Entrusted Management Real Estate Investment Company) will enter the KOSPI market next month. On the 18th, the SK Group headquarters located in Jongno-gu, SK Seorin Building. Photo by Moon Honam munonam@

Vice Chairman Jang Dong-hyun of SK Inc. is also painfully affected by stock prices. Last year, he attempted to transform the company into an investment-focused holding company, and this year achieved securing four new growth engines: advanced materials, bio, green, and digital. On the 4th, SK Inc. became the chair company of the public-private Small Modular Reactor (SMR) Alliance, laying the groundwork for next-generation energy business.

Especially, with the stock price falling for 11 consecutive trading days recently, his statement that he would raise the stock price to 2 million won by 2025 continues to be discussed among shareholders.

Park Jung-ho, vice chairman responsible for both SK Hynix and SK Square, born in 1963, is the youngest among the vice chairmen along with Vice Chairman Jang. The problem lies in performance. As the semiconductor market downturn deepens, SK Hynix is expected to record operating losses of 5 to 7 trillion won in the first half alone. However, there is high anticipation for a rebound in the second half, focusing on high-value-added products such as high-capacity DDR5 and high-bandwidth memory (HBM). The stock price also recently hit a new high last month, continuing its upward trajectory.

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