As the regular shareholders' meeting of major domestic corporations approaches, the 'big hand' National Pension Service (NPS) is progressively disclosing its voting directions. Notably, it has decided to oppose the appointment of Jeon Young-hyeon as an internal director of Samsung Electronics and the appointment of Hyun Jun as an internal director of Hyosung Heavy Industries.
On the 14th, the NPS is systematically disclosing its shareholder rights exercise details for this year's general meetings through its official website. It announced its voting directions concerning major conglomerates, including Shinsegae, Hyundai Motor, Hyosung Heavy Industries, LG Energy Solution, Samsung Electronics, and Hyundai Mobis.
Among these, a noteworthy decision is to oppose the proposal to appoint Jeon Young-hyeon as an internal director of Samsung Electronics. The NPS stated that Jeon 'falls under the category of individuals with a history of undermining corporate value or infringing upon shareholder rights.' The shareholders' meeting of Samsung Electronics is scheduled for the 19th of this month. As of the end of last year, the NPS held 7.25% of Samsung Electronics' equity.
Market analysts suggest this is related to past criticisms regarding Samsung Group's subsidiaries favoring internal meal contracts. In 2021, the Fair Trade Commission imposed a penalty surcharge of 4.4 billion won on Samsung SDI for favoring its subsidiary, Samsung Welstory, under unfavorable conditions. In 2017 when this favoritism occurred, Jeon was the CEO of Samsung SDI.
The NPS also decided to oppose the reappointment of Heo Eun-nyung as an external director of Samsung Electronics. The NPS remarked that 'Heo is deemed to compromise independence as an external director due to conflicts of interest at the time of initial appointment.' Furthermore, it has deemed the approved cap of 36 billion won for directors' compensation at Samsung Electronics to be excessive and decided to vote against it.
The NPS's decision to oppose the appointment of Hyun Jun as an internal director of Hyosung Heavy Industries also draws attention. The NPS explained that 'Hyun is categorized as someone who, due to excessive concurrent positions, is unable to fulfill loyalty duties and has a history of undermining corporate value or infringing upon shareholder rights.'
Currently, Chairman Cho holds several positions, including CEO of Hyosung, internal director of Hyosung TNC, non-executive internal director of Hyosung Investment and Development, and part-time internal director of FMK. The shareholders' meeting of Hyosung Heavy Industries will be held on the 20th of this month. The board of directors of Hyosung Heavy Industries stated that they recommended Cho as an internal director because he 'has contributed to global business growth and enhanced responsible management by leading proactive investments and discovering new growth engines for the group.'
On the 13th, the NPS's Institutional Investor Responsibility Committee reviewed and announced the voting direction for the proposals at the shareholders' meetings of four companies, including Hyosung TNC, HS Hyosung Advanced Materials, POSCO Holdings, and HiteJinro. The committee decided to exercise opposing voting rights, citing excessive caps on directors' compensation for both Hyosung TNC and HS Hyosung Advanced Materials.
The Institutional Investor Responsibility Committee is a private expert body that reviews and decides on the NPS's shareholder rights exercise and responsible investment directions. The NPS's voting direction is essentially decided by the Investment Committee of the NPS Fund Management Headquarters. The committee will make decisions on matters that are difficult for the NPS to judge for or against, or those for which at least three out of the nine commissioners request referral.
The NPS exercises shareholder rights against more than 700 listed companies annually. From 2016 to 2024, the NPS voted in favor of 82.3% and against 17.2% of a total of 3,181 proposals.