Governance Forum: "SK Co., Ltd. Must Cancel Treasury Shares to Enhance Value"

Chairman Lee Nam-woo: "We Must Set an Example with Shareholder-Centered Decision Making"

The Korea Corporate Governance Forum announced on the 4th that SK Inc. must cancel its treasury shares to achieve true value-up.

Professor Namwoo Lee, Graduate School of International Studies, Yonsei University (Chairman of the Korea Corporate Governance Forum) Photo by Jinhyung Kang aymsdream@

Namwoo Lee, Chairman of the Korea Corporate Governance Forum, referred to the 'Financial Story' disclosed by SK Inc. at the investor meeting immediately after the 2021 shareholders' meeting. He said, "At that time, the company's goal of achieving a market capitalization of 140 trillion won by 2025 meant a target stock price of 2 million won," adding, "Unfortunately, three years later, SK Inc.'s stock price falls far short of that." He continued, "I want to ask whether the board of directors has kept total shareholder return in mind when making capital allocation decisions so far," and pointed out, "It is not too late now, so the next board should reconsider capital allocation from scratch."

Chairman Lee also addressed SK Inc.'s excessive number of treasury shares, saying, "Due to treasury shares amounting to 25% of the issued shares, the stock has been continuously traded at a discount," and added, "I hope that the long-awaited news of canceling all treasury shares will be delivered soon to ordinary shareholders and the National Pension Service, who have been suffering from large-scale losses." He emphasized, "Foreign investors with extensive experience investing in Korea tend to be cynical, saying that non-canceled treasury shares only incur opportunity costs," and stressed, "Treasury shares involve 'company cash,' so they should not be used for defending the management rights of specific shareholders through third-party disposition, but rather should be canceled for the benefit of all shareholders."

Currently, SK Inc.'s shareholder return policy aims to maximize shareholder value based on the repurchase and cancellation of treasury shares. Regarding this, Chairman Lee said, "SK Inc. is like the eldest brother in the group," and noted, "Last year, SK Group emphasized good governance to establish the board of directors as a substantive highest decision-making body, such as by holding the 'SK Directors Summit 2023'." He added, "I hope that the board will take this opportunity to make shareholder-centered decisions that serve as a model for other affiliates and domestic listed companies."

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