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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] South Korea’s National Pension Service (NPS) has designated Hyosung TNC as a public focus management company and decided to oppose the appointment of Hyosung Group Chairman Cho Hyun-joon as a board director.
The NPS Trustee Responsibility Committee held its fourth meeting on March 12 and reviewed how the pension fund would exercise its voting rights at Hyosung TNC’s upcoming annual shareholders’ meeting.
The NPS said it had held two years of private dialogue with the company over concerns that the executive compensation cap was excessive, but decided to place the firm under public focus management after concluding that sufficient improvements had not been made.
The fund also announced it will vote against Cho’s reappointment as a director at the March 18 shareholders’ meeting, citing his history of actions deemed to undermine corporate value or shareholder rights.
In addition, the NPS plans to oppose the appointments of director candidate Yoo Cheol-kyu and outside director candidate Lee Jae-woo, who is also nominated as an audit committee member, holding them responsible for failing to improve executive compensation practices despite previous engagement efforts.
The pension fund will also oppose proposed amendments to the company’s articles of incorporation, arguing that a clause requiring director candidates to receive recommendations from at least one-third of the incumbent board members could limit the ability of minority shareholders to nominate directors, contradicting the spirit of recent revisions to the Commercial Act aimed at improving board diversity.
It will further vote against approval of the executive compensation cap, citing the company’s failure to address the issue despite years of stewardship engagement.
The NPS Investment Management division said it plans to exercise voting rights more actively during this year’s shareholder meeting season, reflecting the intent of recent Commercial Act reforms designed to strengthen shareholder rights.
The fund also discussed new guidelines related to treasury share cancellation, following amendments to the law requiring companies to cancel treasury shares unless shareholders approve their retention or disposal each year. The NPS said it will establish detailed voting guidelines on treasury share matters based on the discussions and apply them to future stewardship activities.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
