Korea Zinc will accept part of the shareholder proposals requested by Young Poong and MBK Partners and put them on the agenda as formal items at the upcoming regular shareholders meeting. The directors' duty of loyalty to all shareholders will be codified in the articles of incorporation, and a large pool for dividends will be secured, strengthening the shareholder-return stance.
On the 23rd, according to Young Poong and MBK, Korea Zinc held a board meeting and finalized the items to be submitted to next month's regular shareholders meeting. The measures reflect proposals from the largest shareholder, Young Poong and MBK, including codifying directors' duty of loyalty to all shareholders and securing funds for interim dividends, aimed at enhancing shareholder value and improving governance.
Young Poong and MBK said that if the directors' duty of loyalty is specified in the articles, the company will use the interests of all shareholders as the benchmark in matters that have a significant impact, such as new share issuance, capital transactions, and large-scale investments. They added that this marks the starting point for shifting the decision-making structure from management-centered to shareholder-centered.
The board confirmed as an agenda item the approval of a cash dividend of 20,000 won per share. This exceeds the shareholder proposal by Young Poong and MBK to convert 392.5 billion won of discretionary reserves into a source for dividends (undistributed retained earnings). The assessment is that while the board recognized the intent of Young Poong and MBK's shareholder return, it showed an even stronger commitment to shareholder returns.
In addition, the company will cancel 50% of the remaining treasury shares and use the rest over 10 years for performance-based compensation for employees and executives. It will also overhaul how the board operates. Previously, notices to convene the board were given one day in advance, but this will change to three days in advance. The intent is to enable substantive review of agenda items by the board. It will also codify the right to request information to protect minority shareholders.
Proposals to split the par value of shares and to introduce an executive officer system will also be put on the agenda. However, unlike the earlier items, these are agenda items submitted solely as shareholder proposals by Young Poong and MBK, so the chance of passage at the meeting is not high. Young Poong and MBK proposed splitting Korea Zinc shares into one-tenth to increase share liquidity and improve access for individual investors, and introducing an executive officer system as a way to expand the board's authority.
Young Poong and MBK said, "This board decision is the opening act of a structural improvement toward normalizing Korea Zinc's governance," adding, "We will continue to ensure the board operates based on the interests of all shareholders and will keep pushing ahead with remaining governance improvement tasks, including reshaping the board."