VIP Asset Management: "Director Remuneration Exceeds Total Dividends... WELDEX Agenda Rejected"

The agenda item to set the limit for directors’ remuneration at WELDEX was rejected due to opposition from VIP Asset Management.

On March 27, VIP Asset Management announced that the proposal to establish new regulations for directors’ remuneration was voted down at WELDEX’s regular general shareholders’ meeting, held on March 26 in Gumi, North Gyeongsang Province. This was because Kim Minkook, CEO of VIP Asset Management and WELDEX’s second-largest shareholder, attended the meeting in person and cast a vote against the proposal.

VIP Asset Management cast a dissenting vote because, according to them, WELDEX’s management tried to increase the directors’ remuneration limit before making efforts to improve shareholder value. WELDEX has a financial structure that accumulates approximately KRW 50 billion in cash annually, in addition to KRW 150 billion in existing cash reserves.

However, WELDEX’s average dividend payout ratio over the past three years was only 1%. For this year, the payout ratio was 4%, with a total dividend of KRW 1.6 billion. A representative from VIP Asset Management stated, "Last year, the total dividends distributed to all shareholders (KRW 1.6 billion) were lower than the combined remuneration of the three registered directors (KRW 2.25 billion)," adding, "Before increasing the remuneration limit for directors, the company’s policies must change so that the company shares its performance with shareholders."

In the initial notice of WELDEX’s shareholders’ meeting earlier this month, a new golden parachute clause was included that would have awarded dismissed directors twenty times their average annual remuneration, and the directors’ remuneration limit was proposed to be raised to KRW 10 billion. Due to objections from VIP Asset Management, the golden parachute clause was removed, and the remuneration limit was adjusted to KRW 8 billion.

At the shareholders’ meeting, 3.3 million shares (69.2%) voted against the directors’ remuneration agenda, while 1.47 million shares (30.8%) voted in favor, indicating that the majority of shareholders, excluding the largest shareholder, opposed the proposal. Following the rejection of the directors’ remuneration limit, WELDEX will need to convene an extraordinary general meeting.

CEO Kim commented, "The extraordinary general meeting will not simply be a venue to reconsider the remuneration limit for executives," and added, "We hope it will serve as a turning point where WELDEX demonstrates meaningful changes to its shareholders."

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