As investors pressured to improve governance, the process of taking a board seat at flagship unit Samsung Electronics was accelerated by Jay Y. Lee, de facto head of South Korea's sprawling Samsung Group.
A controversial merger of two group businesses, Samsung C&T and Cheil Industries, backed by a bid by U.S. activist hedge fund Elliott Management last year, was narrowly blocked by the Samsung Group. The Lee family put its interests ahead of those of shareholders, was the criticism that the deal had sparked.
Calls for the world's biggest smartphone maker to be split in two, and for shareholders to be handed a 30 trillion won ($26 billion) dividend are being made in its latest campaign by Elliott, which owns 0.62 percent of Samsung Electronics.
"Over the past couple of years, there were repeated requests from internal and external board members for Lee to join the board, which he had persistently resisted. But the (2015) attack from Elliott was one of the triggers that prompted him to take a board seat earlier than planned, and consider governance issues more seriously," reported the media quoting a source in the company and with knowledge of the matter.
It will respond to Elliott's latest proposals by the end of this month, Samsung Electronics said in October.
After his father Lee Kun-hee was hospitalized in 2014 following a heart attack, Lee, 48, the conglomerate's unassuming heir-apparent had previously orchestrated operations from behind the scenes. Sources said that he had finally been persuaded to stand for a seat on Samsung Electronics' board at next year's March shareholder meeting.
But a chance to get Lee on to the board ahead of schedule had developed after a shareholder meeting was triggered last month following the sale of the company's printer business to HP Inc which required investor approval.
"He felt it was time and he was ready," said the second person familiar with the issue.
To enable Lee to participate more actively in important decisions such as the composition of the management team and acquisitions, he was nominated for the October meeting rather than March, Samsung Electronics said. it said that Lee would also be granted formal responsibility for the company's management by the board seat.
Samsung has been streamlining its complex group ownership structure and boosting payouts in a nod to the chorus for more transparency and shareholder handouts. Samsung Electronics may repurchase more to appease investors after the expensive collapse of its Galaxy Note 7 smartphone even as the company has bought back 11.4 trillion won ($9.9 billion) worth of its own shares since last year.
"It shows that he wants to have a more global standard of board governance," said another person familiar with the matter, who declined to be named due to the sensitivity of issue, adding Lee wants the board to be the key decision-making body. "I imagine there will be more happening in board empowerment."
Lee is signaling to investors he is ready to be put in the spotlight, and for them to judge his performance by taking a seat on the board of the group's crown jewel.
(Source:www.reuter.com)
A controversial merger of two group businesses, Samsung C&T and Cheil Industries, backed by a bid by U.S. activist hedge fund Elliott Management last year, was narrowly blocked by the Samsung Group. The Lee family put its interests ahead of those of shareholders, was the criticism that the deal had sparked.
Calls for the world's biggest smartphone maker to be split in two, and for shareholders to be handed a 30 trillion won ($26 billion) dividend are being made in its latest campaign by Elliott, which owns 0.62 percent of Samsung Electronics.
"Over the past couple of years, there were repeated requests from internal and external board members for Lee to join the board, which he had persistently resisted. But the (2015) attack from Elliott was one of the triggers that prompted him to take a board seat earlier than planned, and consider governance issues more seriously," reported the media quoting a source in the company and with knowledge of the matter.
It will respond to Elliott's latest proposals by the end of this month, Samsung Electronics said in October.
After his father Lee Kun-hee was hospitalized in 2014 following a heart attack, Lee, 48, the conglomerate's unassuming heir-apparent had previously orchestrated operations from behind the scenes. Sources said that he had finally been persuaded to stand for a seat on Samsung Electronics' board at next year's March shareholder meeting.
But a chance to get Lee on to the board ahead of schedule had developed after a shareholder meeting was triggered last month following the sale of the company's printer business to HP Inc which required investor approval.
"He felt it was time and he was ready," said the second person familiar with the issue.
To enable Lee to participate more actively in important decisions such as the composition of the management team and acquisitions, he was nominated for the October meeting rather than March, Samsung Electronics said. it said that Lee would also be granted formal responsibility for the company's management by the board seat.
Samsung has been streamlining its complex group ownership structure and boosting payouts in a nod to the chorus for more transparency and shareholder handouts. Samsung Electronics may repurchase more to appease investors after the expensive collapse of its Galaxy Note 7 smartphone even as the company has bought back 11.4 trillion won ($9.9 billion) worth of its own shares since last year.
"It shows that he wants to have a more global standard of board governance," said another person familiar with the matter, who declined to be named due to the sensitivity of issue, adding Lee wants the board to be the key decision-making body. "I imagine there will be more happening in board empowerment."
Lee is signaling to investors he is ready to be put in the spotlight, and for them to judge his performance by taking a seat on the board of the group's crown jewel.
(Source:www.reuter.com)
