CJ Chooses Stability Over Reform... 'Pinpoint Personnel Changes' for Underperforming Affiliates

CJ CheilJedang and Hanjin Transportation Change Only CEOs
Executive Promotions Drastically Reduced from 44 to 19
Late Personnel Changes Bring Big Pressure...Improved Mid-term Plan Execution

Lee Jae-hyun, Chairman of CJ Group, made the '2024 Regular Executive Personnel Appointment' after much deliberation, with the key focus being stability rather than reform.

Aside from appointing Kang Shin-ho, CEO of CJ Logistics, who achieved record-high performance last year, as the emergency relief pitcher for CJ CheilJedang, and naming Shin Young-soo to fill the vacant position at CJ Logistics' Korea Business Division, there were no other leadership changes. Additionally, promotions of new management leaders were drastically reduced by more than half. However, many promotions came from CJ Logistics and CJ Olive Young, which showed excellent performance, maintaining the principle of rewarding merit and punishing faults.

Regular Personnel Appointment After 16 Months Due to Core Affiliates' Underperformance... Emphasis on Executing the '2023-2025' Mid-term Strategy Rather Than Innovation

CJ Group announced its 2024 regular executive personnel appointments on the 16th. This is the first such appointment in a full 16 months since the last one in October 2022. It is unusual for regular appointments to be delayed beyond the new year. The chairman's concerns grew as core affiliates CJ CheilJedang and CJ ENM posted lackluster results. With CJ Group Chairman Sohn Kyung-shik diagnosing an "unprecedented crisis" in his New Year's address, there was widespread speculation inside and outside the group about management reform.

However, Chairman Lee’s choice leaned toward stability except for CJ CheilJedang. Since half of the first quarter had already passed, making sweeping organizational changes was burdensome, and it is analyzed that this decision was aimed at enhancing the execution of the '2023-2025 Mid-term Strategy' announced at the end of 2022. At that time, Chairman Lee presented the mid-term strategy keywords as ▲ securing a super-gap capability ▲ accelerating innovative growth centered on four major growth engines ▲ securing top talent ▲ and advancing financial strategy.

Kang Shin-ho, CEO of CJ CheilJedang, and Shin Young-soo, CEO of CJ Logistics

Operating Profit Down 35% at 'CJ CheilJedang' Leads to Targeted Personnel Changes... Kang Shin-ho Returns as Emergency Relief Pitcher

However, the decision regarding CJ CheilJedang, a core company suffering performance deterioration due to weakness in the B2C sector despite the global 'K-Food' boom, was different. While food companies such as Nongshim and Samyang Foods achieved record-high performances, CJ CheilJedang’s operating profit fell by more than 35% year-on-year to 819.5 billion KRW.

Accordingly, Chairman Lee appointed Kang Shin-ho, CEO of CJ Logistics, as the new CEO, replacing Choi Eun-seok. Kang, who previously served as CEO of CJ CheilJedang, had innovated the structure of major business divisions and improved organizational culture at CJ Logistics, achieving a record operating profit of 480.2 billion KRW last year. Kang was promoted to Vice Chairman in this appointment. This marks the first time a CJ Group executive hired through open recruitment has been promoted to Vice Chairman. The vacant CEO position at CJ Logistics was filled by Shin Young-soo, CEO of CJ Logistics' Korea Business Division.

Gu Chang-geun, CEO of CJ ENM, which also experienced poor performance alongside CJ CheilJedang last year, was retained. CJ ENM recorded an operating loss of 14.6 billion KRW last year, turning to a deficit. However, a record rebound in the fourth quarter helped the company hold its ground under adverse conditions, securing Gu’s position.

Additionally, CEOs whose terms end in March this year?Jung Sung-pil of CJ Freshway, Kim Chan-ho of CJ Foodville, and Lee Sun-jung of CJ Olive Young?were also retained. Heo Min-hoe, CEO of CJ CGV, also kept his position.

Not only were CEO appointments limited, but the scope of executive appointments was also very small. Only 19 new management leaders were appointed this time, less than half compared to 53 in 2022 and 44 in 2023. However, among the 19, six came from CJ Logistics and four from CJ Olive Young, continuing the principle of rewarding merit and punishing faults. Earlier this year, Chairman Lee personally visited these two companies, which achieved excellent results, to encourage employees.

Lee Seon-ho, Head of Food Growth Promotion Office at CJ CheilJedang

Owner Family’s Fourth Generation Lee Sun-ho Excluded from Promotion... Continues as Control Tower for Overseas Food Business

Meanwhile, in this personnel appointment, Lee Sun-ho, the fourth generation of the owner family and head of CJ CheilJedang’s Food Growth Promotion Office, was not promoted. Despite the overall poor performance of CJ CheilJedang, the overseas food business division led by Lee recorded sales of 1.3866 trillion KRW in the fourth quarter, surpassing domestic sales of 1.38 trillion KRW for the first time, successfully expanding its scale. He is expected to continue playing the role of control tower for the global food business covering the Americas, Europe, and the Asia-Pacific region.

Earlier, regarding the selection of CJ CheilJedang’s overseas food business success case as a Harvard Business School case study, Lee said, "As global interest in Korean culture spreads, CJ CheilJedang has accelerated its overseas business expansion," adding, "We will speed up the 'globalization of Korean food culture' so that enjoying K-Food becomes a cultural norm."

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