It was announced on the 16th that Jeon Seong-ho, CEO of SOLUM, and Align Partners Asset Management reached a comprehensive agreement to advance SOLUM's governance structure and maximize shareholder value.
First, Jeon said he would proactively address market concerns related to the third-party allotment redeemable convertible preferred shares (RCPS) issued in June last year.
To that end, the largest shareholder decided to distribute 50% of the call option volume granted to him as incentives to key executives and employees recommended by the compensation and evaluation committee.
In addition, he will not exercise the right of first refusal on the RCPS and will create an environment in which RCPS investors can vote neutrally on key shareholders' meeting agenda items. Jeon said he will soon proceed with the relevant procedures to reflect these measures and communicate transparently with the market and shareholders through disclosures.
Jeon and Align Partners will seek to amend the articles of incorporation at this year's shareholders' meeting to enhance SOLUM's management transparency. They agreed to pursue forming a majority-independent board, and to establish a related-party transactions committee, an independent director nomination committee, and a compensation and evaluation committee, all composed entirely of independent directors.
To further strengthen the board's independence and expertise, they agreed to table a proposal to appoint as independent directors strategy expert Seo Young-jae, formerly of LG Electronics, recommended by Align, and e-commerce and retail expert Na Young-ho, formerly head of Lotte ON.
For the auditor role, they agreed to enhance oversight by expanding the current single full-time auditor system to two and to pursue a plan to boost expertise and transparency by tabling a proposal to appoint Im Seong-yeol, a finance expert jointly vetted by both sides, as auditor.
Jeon also announced that after stepping down, the company will transition to a professional management system led by qualified experts. This will also be specified in the corporate governance report to be disclosed in the future.
Jeon also said that, considering operational efficiency in business divisions and enhancing corporate value, he would pursue a spin-off if a spin-off is suitable as a plan to promote the interests of the company and shareholders.
If a spin-off takes place, they agreed to ensure that the two companies can conduct independent professional management without acquiring each other's equity.
Lee Chang-hwan, CEO of Align Partners, said, "We will pay close attention and provide support so that SOLUM can regain market recognition befitting its status as a leading global electronic components and ESL company."
Jeon said, "I view it positively that Align Partners resonates with SOLUM's long-term growth strategy and future vision and can help design governance improvements together."