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Korean Air seeks staff vote
March 15th 2019
Employees asked to let airline be their proxy ahead of confrontational meeting to re-appoint Chairman Cho. Read More »
Korean Air is being criticised by the Korean public for pressuring staff shareholders to give their proxy vote to a company appointee. A Korean Air shareholder meeting on 27 March is expected to be confrontational since an activist group is calling for Chairman Cho Yang-ho not to be re-appointed.
There have been growing calls for Korean Air to distance or separate itself from the Cho family that has largely managed the airline. There have been a series of scandals at the family, some involving the company and some personal. Most recently, Chairman Cho was indicted on charges including embezzlement and breach of trust. Other investigations are ongoing.
The activist group claims to represent 12.01% of shareholders in Korean Air's parent company. This figure has been slowly increasing. The activist group has sought to secure proxy votes.
Director re-appointments must be approved by at least two-thirds of attending shareholders. Chairman Cho accounts for 33.34% of votes, so Korean Air is seeking support for another third of shareholders.
The airline is said to be contacting individual, non-affiliated shareholders as well as shareholders who are also company employees. "We solicited employees to exercise their voting rights by proxy in accordance with Article 152 of the Capital Market and Financial Investment Business Act," a company spokesman told the Korea Times.
A Korean Air employee anonymously posted on social media: "I was called by an executive who asked me to entrust my voting right to the company. To avoid disadvantages, I had no choice but to sign a power of attorney document."
The government-backed National Pension is expected to oppose the re-appointment. There are differing views on how much direct influence the government has. The Pension is said to disapprove of Chairman Cho’s re-appointment because of criminal charges but also his directorship of affiliated companies. These intertwined relationships are the heart of the chaebol empires.
