Coway's General Meeting Fails to Adopt Cumulative Voting System... "We Will Continue to Earn Shareholders' Trust"

Decision to Cancel 650,000 Treasury Shares
"Shareholder Return Ratio to Be Increased to 40%"

At Coway's regular shareholders' meeting, the introduction of a cumulative voting system proposed by the activist fund Align Partners was rejected.

On the 31st, Coway announced that at the 36th regular shareholders' meeting held at Coway's headquarters in Gongju, Chungnam, the agenda items including ▲approval of financial statements, consolidated financial statements, and appropriation of retained earnings ▲appointment of outside directors ▲appointment of audit committee members ▲approval of director remuneration limits ▲capital reduction for the cancellation of treasury shares were submitted and finally approved.

The proposal to introduce a cumulative voting system, submitted by Align Partners Asset Management through a shareholder proposal, received only 46.6% approval of the voting rights present and was ultimately rejected. The cumulative voting system grants voting rights equal to the number of directors to be appointed when multiple directors are elected, allowing shareholders to concentrate votes on one or several candidates. It is considered a minority shareholder-friendly system as it increases the possibility of appointing candidates recommended by minority shareholders.

According to the special provisions on cumulative voting under the Commercial Act, when a listed company with total assets of 2 trillion won or more passes a resolution at a shareholders' meeting to amend its articles of incorporation to introduce a cumulative voting system, all shareholders can exercise voting rights only up to 3%. Accordingly, Coway's largest shareholder, Netmarble, holds a 25.1% stake, but voting rights exceeding 3% were restricted only for the agenda item on the introduction of the cumulative voting system. Coway explained, "Our shareholders currently believe that the current board operation method sufficiently secures independence and transparency, making it suitable for continuous corporate growth and enhancement of shareholder value."

As part of its mid- to long-term shareholder return expansion policy at this shareholders' meeting, Coway decided to cancel approximately 650,000 treasury shares. In addition, Coway explained that it will continuously conduct treasury share repurchases and cancellations in the future, significantly raising the total shareholder return ratio from 20% to 40%, and actively pursue various measures to enhance shareholder value.

Coway newly appointed Professor Kim Jeong-ho of the Department of International Studies at Korea University Graduate School of International Studies and Kim Tae-hong, CEO of Growth Hill Asset Management, as outside directors, and reappointed lawyer Lee Gil-yeon. Outside directors Kim Tae-hong and Lee Gil-yeon were also appointed as audit committee members. The candidates for outside director and audit committee member proposed by Align Partners voluntarily withdrew, resulting in the agenda being discarded.

Coway CEO Seo Jang-won said, "As a result of expanding research and development investments to develop innovative products and secure new technologies, the ICON series, BEREX mattress, and massage chairs have led to high sales growth domestically and globally, achieving stable business performance. This year, we will continue steady growth based on core business advancement, while expanding shareholder returns and advancing governance, striving to strengthen corporate value and repay shareholders' trust."

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