At a recent Korea Zinc shareholders meeting, the retirement pay rules for honorary chairmen were partially revised. As a result, the accrual of retirement pay that had been paid to Honorary Chairmen Choi Chang-young and Choi Chang-geun, the uncles of Chairman Choi Yoon-beom, is expected to be fully suspended.
According to the investment banking (IB) industry on the 25th, the "approval of the revision to the executive retirement pay rules" proposed by Young Poong and MBK Partners was passed at the regular Korea Zinc shareholders meeting held on the 24th. The key point of this revision is to exclude "honorary chairman" from the category of "chairman" eligible for retirement pay.
Under the previous rules, Korea Zinc had accrued retirement pay for the chairman level, including honorary chairmen, by applying a payment rate of "four times per year of service." While the Korea Zinc honorary chairmen were already receiving high annual salaries in the 2 billion–won range, retirement pay had been accrued at a rate exceeding the typical two to 2.5 times applied to presidents of listed companies.
It appears that Young Poong and MBK Partners, which are in a management control dispute with Korea Zinc, proposed this agenda item on the grounds that the retirement pay paid to honorary chairmen is excessive. With the passage of this item, additional retirement pay accruals will be fully suspended for the two honorary chairmen, Choi Chang-young and Choi Chang-geun.
Meanwhile, the most closely watched issue at this Korea Zinc shareholders meeting—the board composition—was finalized with eight members from Chairman Choi's side, five from Young Poong and MBK Partners, and one from the U.S. government side joining. The gap narrowed somewhat from the previous 11 (Korea Zinc) to 4 (Young Poong and MBK). Chairman Choi's side can still handle key agenda items without help from the U.S. director, but Young Poong and MBK Partners are expected to be able to increase oversight of Choi's management.