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  • Pension Fund Supports KT&G CEO Nominee

    Pension Fund Supports KT&G CEO Nominee

    South Korea’s National Pension Fund (NPF) will vote in favor of KT&G’s CEO nominee Bang Kyung-man at the cigarette manufacturer’s upcoming shareholder meeting, reports the Yonhap News Agency.

    The NPF will also vote for former Judge Sohn Dong-hwan as a new KT&G board member.

    The NPF holds a 6.2 percent stake in KT&G. 

    The Industrial Bank of Korea, which is state-run and holds an 8 percent stake in KT&G, has opposed Bang’s nomination, citing falling profitability and dubious business practices during his board tenure. Sohn is a director candidate proposed by the Industrial Bank of Korea.

  • Top KT&G Shareholder Opposes CEO Nominee

    Top KT&G Shareholder Opposes CEO Nominee

    Photo: zzzdim

    KT&G’s biggest shareholder is opposing the nomination of Bang Kyung-man as the cigarette manufacturer’s new CEO, reports Yonhap News. The Industrial Bank of Korea (IBK), which owns about 8 percent of KT&G, cited falling profitability and dubious business practices during the nominee’s tenure as a board member.

    On Feb. 22, KT&G’s CEO candidate recommendation committee selected Kyung-man Bang, senior executive vice president of KT&G, as the final CEO candidate, citing his performance on criteria such as management expertise, global acumen, strategic thinking skills, stakeholder communications and universal morality and ethical awareness.

    KT&G shareholders are due to vote on the nomination during the company’s annual general meeting on March 28. The appointment would mark KT&G’s first leadership change in nine years.

    IBK opposes Bang’s nomination because “KT&G’s operating profit has fallen more than 20 percent” since he was appointed as vice president of the cigarette maker, an IBK official was quoted as saying.

    “Given a decision to secure friendly shares using its own stocks, the independence and fairness of the current board of directors are bound to be seriously questioned,” the official said.

    In a regulatory filing dated March 12, IBK also made a shareholder proposal to improve KT&G’s governance by strengthening the expertise and independence of the board of directors.

    KT&G has faced pressure recently to be more transparent in its CEO selection process. In a video published ahead of the South Korean tobacco firm’s annual general meeting, KT&G shareholder Flashlight Capital Partners highlighted what it considered the problems during previous CEO nominations.

    In January, the incumbent CEO, Baek Bok-in, said he would not seek reappointment.

  • KT&G Prepares for Shareholder Meeting

    KT&G Prepares for Shareholder Meeting

    Photo: KT&G

    KT&G’s board of directors has tabled several items to be discussed at the company’s annual general meeting of shareholders on March 28. These items include the appointment of Kyung-man Bang as president and Min-kyu Lim as outside director as well as the Industrial Bank of Korea’s shareholder proposal of appointing Dong-hwan Shon as outside director and Agnes’ shareholder proposal of appointing Sang-hyun Lee as outside director.

    The board has selected Kyung-man Bang, the current chief operating officer of KT&G, as the final CEO candidate, citing his extensive knowledge of the company’s overall business operations and his capability to steer the company through market challenges and toward the aspiration of becoming a “global top-tier” company.

    Min-kyu Lim, nominated for the role of outside director, is renowned for his leadership at major listed companies in Korea, including as CEO of OCI Materials and SK Materials. His extensive expertise in organizational and risk management and sustainable business practices is also well regarded.

    Sang-wook Kwak, an outside director candidate who will also serve as an audit committee member upon appointment, is counselor at Hwa Hyun, a Korean law firm. He previously served as chief of the Criminal Department at the Supreme Prosecutors’ Office of the Republic of Korea before assuming the role of inspection commissioner at the Board of Audit and Inspection.

    “We have always valued the legitimate exercise of shareholder rights and have decided to table all shareholder proposals for the upcoming AGM without any objection, reflecting our respect for the integrity and purpose of shareholder proposals,” KT&G wrote in a statement. “We maintain close communication with all of our stakeholders, including shareholders, about KT&G Group’s future vision and growth strategies. Our commitment to maximizing the interests of all shareholders and enhancing the future value of the company remains steadfast.”

  • KT&G Names Final CEO Candidate

    KT&G Names Final CEO Candidate

    Photo: RerF

    KT&G’s CEO candidate recommendation committee has selected Kyung-man Bang, senior executive vice president of KT&G, as the final CEO candidate.

    Pending approval at the annual general meeting of shareholders in late March, Bang is set to officially assume the role and lead the company for the next three years.

    Bang was chosen following an assessment of each shortlisted candidate based on five criteria: management expertise, global acumen, strategic thinking skills, stakeholder communications and universal morality and ethical awareness.

    With a bachelor’s degree in economics from Hankuk University of Foreign Studies and an MBA from the University of New Hampshire, Bang has held various management positions since joining Korea Tobacco and Ginseng in 1998. His extensive experience includes roles such as managing director of brand management, executive managing director of global headquarters, executive managing director of strategy and planning headquarters and chief business officer.

    Bang, currently the chief operating officer, played a pivotal role in formulating the company’s mid-to-long term growth strategies. Among other achievements, he successfully launched the ESSE Change brand and expanded KT&G’s overseas market presence to over 100 countries.

    “Members [of the CEO candidate recommendation committee] have been fully committed to ensuring transparency throughout the candidate assessment process and fair competition without external interference,” said committee Chairman Myung-chul Kim in a statement.

    “I will dedicate myself wholeheartedly to ensuring that KT&G leaps forward as a ‘global top-tier’ company by leading innovation and seizing future growth opportunities,” said Bang.

  • KT&G Recognized for Sustainability

    KT&G Recognized for Sustainability

    Photo: KT&G

    KT&G has been selected as a leading company (Leadership Grade) in the climate change response and water resource management sectors by the global environmental assessment organization CDP (Carbon Disclosure Project).

    Following last year, KT&G has achieved the top grade in the Leadership category in both climate change response and water resource management. In particular, in the water resource management sector, it has risen from Leadership A- last year to the highest grade, A, with only three domestic companies in South Korea receiving an A grade out of the 100 winning companies worldwide. The climate change response sector maintained its Leadership A- grade from last year.

    KT&G established its medium-term to long-term environmental management vision, 2030 Green Impact, in 2021 and has been practicing ESG management to achieve carbon neutrality throughout its value chain. It has set greenhouse gas reduction targets contributing to limiting the rise in global temperatures to within 1.5 degrees Celsius and achieved a 7.5 percent reduction in greenhouse gas emissions from domestic and overseas facilities as of 2022 (compared to the base year of 2020). Additionally, it has enhanced the reliability and objectivity of greenhouse gas emission data by undergoing third-party verification for the emissions in its supply chain.

    In the water resource management sector, KT&G has set a goal to reduce water usage in domestic and overseas manufacturing facilities by 20 percent by 2030 compared to 2020 and is implementing measures to achieve this target. KT&G plans to systematically practice environmental management in the future through the expansion of renewable energy use, water recycling and energy efficiency enhancement.

    CDP, founded in the U.K. in 2000 as a nonprofit organization, requests environmental management information disclosure from over 23,000 companies worldwide and conducts analysis and evaluation of this information. It is also recognized as a credible sustainability assessment organization along with Morgan Stanley International.

    “We have been recognized as an excellent company by CDP for our climate change response and systematic water resource management capabilities in line with global standards,” said a KT&G representative in a statement. “We will continue to promote genuine ESG management, including leading the acceleration of the transition to a circular economy.”

  • KT&G Finalizes Second CEO Shortlist

    KT&G Finalizes Second CEO Shortlist

    Photo: brizmaker

    KT&G’s CEO candidate recommendation committee finalized the selection of candidates to be included in the second shortlist for the next CEO position. The candidates are Chul-ho Her (CEO of Korea Ginseng Corp.), Gye-hyun Kwon (former vice president of Samsung Electronics), Kyung-man Bang (senior vice president of KT&G) and Seok-joo Lee (former CEO of AK Holdings).

    In selecting the candidates, the committee assessed to what extent the qualifications and competencies of the eight candidates on the first shortlist align with the five key competency criteria required for a CEO, which include management expertise, global expertise, strategical thinking skills, stakeholder communications and universal morality and ethical awareness.

    The committee plans to conduct face-to-face interviews with each candidate on the second shortlist and name the final candidate following the committee resolution next week. The CEO will be officially appointed at the annual general meeting of shareholders in late March.

    In a press note announcing the second shortlist, KT&G reiterated its commitment to fair and transparent CEO selection process. In late 2023, shareholder Flashlight Capital Partners urged KT&G to select its next CEO in a more transparent manner.

    “The CEO candidate recommendation committee is fully committed to ensuring the transparency, fairness and objectivity throughout the candidate assessment process, adhering to the principle of maximizing the interests of all shareholders and the future value of the company,” said Myung-chul Kim, chairman of the KT&G CEO candidate recommendation committee.

    “After conducting in-depth interviews with each candidate, we will determine and announce the most suitable candidate for the next CEO position, possessing the leadership qualities necessary to drive KT&G to greater heights of a global leading company.”

  • KT&G Posts Record Revenue

    KT&G Posts Record Revenue

    KT&G posted revenue of KRW1.45 trillion ($1,09 billion) and operating profit of KRW198.6 billion in the fourth-quarter of 2023. For the full-year, the company reported record revenue of KRW5.872 trillion and operating profit of KRW 1.168 trillion.

    KT&G’s record annual revenue was driven mainly by the performance of its overseas combustibles business. The overseas combustibles business reported record annual revenue of KRW1.14 trillion. The combined annual revenue of KT&G’s three core business areas, which also include next-generation products (NGP) and health functional foods, reached KRW3.31 trillion, a 1.1 percent increase year on year.

    KT&G’s NGP business sold 8.24 billion sticks overseas and 5.71 billion sticks in South Korea, reflecting growth rates of 43 percent and 14.4 percent, respectively.

    KT&G achieved an all-time high total overseas sales volume of 61.4 billion sticks, surpassing 60 billion sticks for the first time.

    KT&G projects its annual revenue and operating profit to exceed growth rates of 10 percent and 6 percent, respectively, in 2024. It expects its consolidated year-on-year revenue growth to exceed 15 percent. Additionally, the operating profit from the core business areas is expected to grow 31.5 percent, year on year.

    “Last year was a year dedicated to the successful implementation of a business transformation strategy that focuses on the core business areas, KT&G wrote on its website. “This year, we will continue to strengthen the competitiveness of the core business areas, expand a sustainable business portfolio, and faithfully carry out the shareholder return policy.”

  • KT&G Finalizes CEO Candidates Shortlist

    KT&G Finalizes CEO Candidates Shortlist

    Photo: uaPieceofCake

    The governance committee of KT&G Corp. finalized the first shortlist of KT&G CEO candidates on Jan. 31 and recommended the finalized list to the CEO candidate recommendation committee. The first shortlist includes four external candidates and four internal candidates.

    The governance committee held eight meetings since the end of December to oversee the open recruitment for CEO candidates and conduct comprehensive assessments. Subsequently, the committee selected the first shortlist by taking into account impartial and objective opinions from the advisory panel composed of external experts.

    The CEO candidate recommendation committee will now assess the candidates from the first shortlist in order to ensure sufficient candidate validation and select the most suitable candidate for the CEO position. The committee will finalize the second shortlist of three to four individuals by mid-February and disclose the list upon its finalization.

    Then, the CEO candidate recommendation committee will conduct face-to-face interviews with the candidates on the second shortlist to thoroughly review each candidate. Following the assessment, the committee will name the final CEO candidate and report to the board of directors by the end of February. The board of directors will then table the agenda for the annual general meeting of shareholders after resolution, and the CEO will be appointed following the approval at the annual general meeting of shareholders in late March.

    The CEO candidate recommendation committee is composed entirely of outside directors, without the participation of the incumbent CEO, Bok-in Baek.

  • KT&G Implements Early Settlement Payments

    KT&G Implements Early Settlement Payments

    Image: mnimage

    KT&G is implementing early cash payments of settlement amounts to small and medium-sized partner companies to alleviate their burdens and strengthen cooperative management ahead of the Lunar New Year.

    Among the partner companies that supply raw materials, components and consumables, KT&G is expediting the payment of a total of KRW664 billion to 41 companies more than a month earlier than the regular payment date.

    To ease the financial burden on small and medium-sized partner companies, which face increased capital demands before major holidays such as Lunar New Year and Chuseok each year, KT&G has been executing early payments of settlement amounts. Last Chuseok, they made advance payments totaling KRW917 billion ($497.5 million) to support the liquidity of partner companies.

    Furthermore, KT&G is actively participating in the “Settlement Amount Linked Company” program, which reflects the increase in raw material prices in supplier payments, reducing the burden on small and medium-sized partner companies. This initiative aims to establish a cooperative trading culture and lead the way in the development of a fair market economy.

    In addition to these efforts, KT&G is operating various support systems for mutual growth, such as monthly full cash payments of settlement amounts to alleviate financial difficulties for partner companies.

    “Amidst ongoing global inflation and interest rate hikes, we decided to expedite the payment of settlement amounts to partner companies facing high capital demand ahead of the Lunar New Year,” said a KT&G representative in a statement. “We will continue to explore various support measures to realize the values of mutual growth with partners and enhance sustainability across the entire value chain.”

  • KT&G CEO Won’t Seek Reappointment

    KT&G CEO Won’t Seek Reappointment

    Baek Bok-in (Image: KT&G)

    KT&G’s governance committee on Jan. 11 finalized a longlist of CEO candidates, the company announced on its website. The list comprises 24 individuals including 14 external candidates and 10 internal candidates. The incumbent CEO, Baek Bok-in, has been excluded from the list as he has expressed his intention not to seek reappointment.

    For the external candidates, eight individuals who applied through open recruitment and six individuals recommended by search firms have all been included in the longlist. In addition, 10 internal candidates who have participated in the company’s senior management training program have also been included.

    The CEO appointment process is expected to take about three months. KT&G insists it will be conducted in a fair and transparent manner, following a three-step procedure involving the governance committee, the CEO candidate recommendation committee and approval at the general meeting of shareholders.

    Following the procedure, the governance committee plans to conduct a comprehensive assessment of the candidates who have been longlisted. The governance committee also intends to consider and weigh impartial and objective opinions from the advisory panel, composed of five external experts. The committee will finalize the first shortlist of CEO candidates by the end of this month and recommend it to the CEO candidate recommendation committee.

    Then, the CEO candidate recommendation committee will engage in a systematic and in-depth discussion regarding the candidates included in the first shortlist to form the second shortlist by mid-February. The second shortlist will be disclosed in a transparent manner upon its finalization.

    The final CEO candidate will be named by the end of February. The appointment will be subject to approval at the annual general meeting of shareholders in late March.

    The CEO candidate recommendation committee will be composed entirely of outside directors. Additionally, KT&G’s board of directors plans to propose an agenda item at the upcoming annual general meeting of shareholders to amend the articles of incorporation and make it obligatory to constitute the CEO candidate recommendation committee exclusively of outside directors, regardless of the incumbent CEO’s intentions regarding reappointment.

    Late last year, KT&G shareholder Flashlight Capital Partners urged the tobacco company to select its next CEO in a more transparent manner after expressing disappointment with the current CEO’s performance and identifying several shortcomings in the previous selection procedure.