Ahead of the shareholder meeting season starting on the 19th, retailers are rapidly putting forward agenda items aligned with the government's value-up policy. Typical moves include deleting provisions that exclude cumulative voting or improving dividend procedures to show shareholder-friendly steps.
According to the retail industry on the 11th, Shinsegae, E-MART, and Hyundai Department Store will place on the agenda for shareholder meetings this month the deletion of provisions that exclude cumulative voting. Cumulative voting is a system that, when appointing directors, grants votes equal to the number of directors to be elected per share, allowing shareholders to concentrate their votes on a specific candidate. For example, if three directors are to be appointed, each share is granted three votes, which can be concentrated on one candidate.
Cumulative voting was designed to make it easier for small shareholders to enter the board, and it can still be introduced if a shareholder requests it. However, because corporations could include exclusion provisions in their articles citing management stability or defense of management control, there were not many cases where it actually operated.
However, after the second Commercial Act amendment bill passed the National Assembly in Aug. last year, it became harder to exclude cumulative voting. Under the second Commercial Act amendment, listed companies with total assets of 2 trillion won or more are required to adopt cumulative voting. In addition, as the duty of outside directors expanded from the company to shareholders, it became difficult to include provisions excluding cumulative voting in the articles. This is because if the board's judgment is deemed contrary to shareholders' interests, it could face lawsuits.
Some are also moving in line with the government's value-up intent by boosting shareholder participation. A representative example is Lotte Shopping. Lotte Shopping plans to put on the agenda at this shareholder meeting a basis for holding electronic shareholder meetings. This is positive in that it can increase shareholder participation. Once the electronic shareholder meeting system is introduced, it becomes harder for the company to push through a shareholder meeting to pass items that run counter to shareholders' opinions.
E-MART has submitted an agenda at this meeting to increase dividends and improve dividend procedures by first confirming the dividend amount and designating the dividend record date. From the shareholder's perspective, being able to anticipate the dividend yield helps with investment. It is good for investors in that a blink dividend like before will not occur.
Retailers' shareholder meetings are scheduled to be held one after another starting on the 19th. Lotte Himart and GS Retail will meet on the 19th, and Lotte Shopping on the 20th. Shinsegae will meet on the 24th, and Hyundai Department Store, E-MART, Hanwha Galleria, and BGF Retail on the 26th.