Lotte Card Faces Hurdles in Appointing New CEO... Uncertainty Remains for Year-End Decision

Following the resignation of CEO Cho Jwajin, who took responsibility for the customer information leak caused by a cyber incident at Lotte Card, the process of appointing his successor has been slow to gain momentum. Even with the regular board meeting scheduled for next week, no timeline has been set for forming the Executive Recommendation Committee. The next CEO will face multiple complex tasks, including managing profitability and soundness, handling the aftermath of the incident, restoring consumer trust, and overseeing the sale of the company. As a result, the company is prioritizing a thorough and cautious vetting process.

Lotte Card Headquarters, Jongno-gu, Seoul. Lotte Card

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According to industry sources on December 11, Lotte Card is scheduled to hold its regular board meeting on December 17. However, it has been confirmed that there are no plans to convene the Executive Recommendation Committee during this meeting. A Lotte Card official stated, "The agenda for the regular board meeting does not include a schedule for convening the committee."

To appoint a new CEO, the board must activate the Executive Recommendation Committee, finalize the schedule, and conduct candidate screening and interviews. While there have been rare cases where the board has directly appointed a CEO without screening and interviews, the prevailing view is that, given Lotte Card's current complex crisis, the process will be carried out with exceptional caution and without exception.

The committee currently operates with six members: four outside directors, Lee Jinha, Vice President of MBK Partners, and Kim Wonjae, Chief Financial Officer of Lotte Shopping. Recently, Kwangil Kim, Vice Chairman of MBK Partners, resigned as a non-executive director, reducing the committee from seven to six members. However, there are no plans to fill the vacancy, as appointing a new member would require additional procedural time.

According to industry sources, Lotte Card is prioritizing finding the right candidate over rushing the appointment. Although the company's internal governance rules stipulate that a new CEO must be appointed within 30 days of initiating the succession process, the committee is likely to consider an exception due to the unexpected resignation of the former CEO.

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Multiple industry insiders have commented, "Given the current situation, it is difficult to guarantee that a new CEO will be appointed within the year." While the appointment could technically be made within a few days if the committee meets the quorum, Lotte Card is expected to take its time, as the company needs a "problem-solving CEO" capable of managing the aftermath of the incident, responding to regulatory sanctions, restoring consumer trust, overseeing the sale process, and strengthening growth potential.

There is also speculation that the next CEO is more likely to be recruited externally rather than promoted from within. In principle, anyone at the director level is eligible for promotion to CEO, so executive vice presidents and senior managing directors are also potential candidates. However, these internal candidates are generally considered to lack the industry stature of the former CEO. Cho Jwajin, who led the company for six years after his appointment in 2020, is regarded as a heavyweight in the industry. The current executive vice presidents at Lotte Card are Choi Jaeung, Head of the Personal Customer Business Division and Digi-Roca Division; Jung Donghoon, Head of the Business Strategy Division; and Lee Changju, Head of the Risk Management Division.

Although some in the industry have mentioned former Hyundai Card CEO Kim Deokhwan as a potential candidate, most believe his actual chances are low. A source familiar with Lotte Card's situation stated, "At this point, the candidate pool is unclear, and it is difficult to predict who will be appointed. The rumors about recruiting former CEO Kim are also unfounded and seem unrealistic."

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