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Youngpoong said on the 26th, “The biggest beneficiaries of Korea Zinc’s shareholder return are not ‘Youngpoong’ but the ‘Choi family,’ and although they have already collected hundreds of billions of won in dividends, etc., they are unreasonably defending their management rights by borrowing trillions of dollars in company debt rather than their own money. “They are doing it,” he strongly criticized.
Looking at Korea Zinc’s dividend history for the past five years (2019-2023), which Youngpoong disclosed on this day, the Choi family received 215.9 billion won. The Jang family received 96.7 billion won in dividends.
If the dividend history is expanded to the last 30 years (1994-2023), the Choi family received 364.9 billion won in dividends from Korea Zinc.
Youngpoong said, “It was discovered that the Choi family received a significantly larger amount of dividends. “This only calculates dividends received by individuals, excluding corporations,” he explained, adding, “The biggest beneficiary of Korea Zinc’s ‘shareholder return’ is the Choi family.”
He continued, “Although the Choi family has been representing the management of Korea Zinc and has received dividends exceeding hundreds of billions of won, in the recent dispute over management rights to Korea Zinc, most of them conducted a tender offer of their own stock with company money and company loans, ‘even paying off company debt. “We were criticized for ‘defending management rights,’” he pointed out.
In particular, it was criticized that the funds for this share purchase were raised by reducing Korea Zinc’s distributable profits, which resulted in the distributable profits that should be paid to Korea Zinc’s shareholders in the future being reduced by the amount of the treasury stock purchase.
Youngpoong also received strong criticism from the market when the Choi family announced a plan to increase paid-in capital by 3,732,650 shares of common stock, which is close to 20% of the total issued shares, at 670,000 won per share on October 30, a week after the end of the public stock tender offer. pinched
Youngpoong said, “These people, who are not the largest shareholders but merely management agents, have not only taken the company’s money to gain an upper hand in the management rights dispute, but have also caused the company to incur trillions in debt and are trying to repay the debt out of shareholders’ pockets.” “There was criticism that it was done,” he said.
Youngpoong also attacked Chairman Choi Yoon-beom, saying that he had drastically increased his compensation by around 100% every year before and after his inauguration as chairman in 2022, which was criticized as an ‘excessive increase in compensation.’
Chairman Choi’s compensation, including salary, bonus, and welfare expenses, increased from 1 billion won in 2021 to 1.958 billion won in 2022. It was calculated that he received 3 billion won in 2023, after his inauguration as chairman. Chairman Choi’s compensation has tripled in two years.
Youngpoong pointed out that the fact that the ‘executive severance pay payment regulations’ were revised to increase the severance pay payment rate by executive rank in 2023 and allow severance pay to be paid to the ‘honorary chairman’ also caused a lot of backlash.
Currently, Korea Zinc has three people as honorary chairman: Chairman Choi Chang-geol, the father of Chairman Choi Yoon-beom, and Chairman Choi’s uncles Choi Chang-young and Choi Chang-geun.
Youngpoong said, “With the inclusion of ‘honorary chairman’ in the executive severance pay regulations, it is expected that the severance pay they can receive upon retirement will reach up to tens of billions of won.” “The three honorary chairman have been criticized for receiving excessive compensation in addition to severance pay.” “He pointed out.
He added, “The three honorary chairman are absent from the board of directors and have received compensation of 1 to 2 billion won every year without directly participating in the company’s management. However, honorary chairman Choi Chang-geol has not been receiving compensation since last year.”
On the other hand, Youngpoong, the largest shareholder of Korea Zinc, unlike the Choi family, receives 50 to 100 billion won in dividends from Korea Zinc every year and reinvests the dividend resources into the business, including investing most of it in the environmental improvement project at Yeongpoong Seokpo Refinery, making it comparable to the Choi family. He claimed that it could be done.
Youngpoong explained that it is establishing and promoting an environmental improvement innovation plan worth 100 billion won every year, including introducing a ‘zero discharge system’ in 2021, which will be the first smelter in the world to reprocess all process water and reuse it in the process without discharging it to the outside.
In addition, in addition to the expenses set as provisions each year, approximately 100 billion won is being invested in environmental improvement through investment, expenses, and operating expenses.
Given the concerns regarding executive compensation and severance packages at Korea Zinc, what specific regulatory reforms or corporate governance best practices could be implemented to ensure alignment between executive rewards and both shareholder interests and long-term company sustainability?
## World Today News: Interview on Korea Zinc
**Introduction:**
Welcome to World Today News. Today we are delving into the ongoing controversy surrounding Korea Zinc and its shareholder structure. Joining us to shed light on this complex situation are two experts: [Guest 1 Name], [Guest 1 Affiliation], and [Guest 2 Name], [Guest 2 Affiliation].
**Section 1: Dividend Disparity & Management Challenges**
**(To both guests)**
* The article highlights a stark disparity in dividend distributions between the Choi family and other shareholders of Korea Zinc. What are the implications of such a dividend distribution strategy for a publicly traded company, and how does it affect investor confidence?
**(To Guest 1)**
* Youngpoong argues that the Choi family has utilized company funds to bolster their management position, potentially impacting future shareholder returns. How common is this practise, and what regulatory mechanisms are in place to prevent such actions?
**(To Guest 2)**
* From a broader corporate governance perspective, what are your thoughts on the balance between shareholder returns and the reinvestment of profits for long-term growth and sustainability?
**Section 2: Executive Compensation and Severance Packages**
**(To both guests)**
* The article details concerns regarding the substantial increases in executive compensation and the inclusion of ‘honorary chairman’ in severance pay regulations at Korea Zinc. How do these practices align with principles of ethical corporate governance?
**(To Guest 1)**
* What are the potential ramifications of such generous severance packages for Korea Zinc’s financial performance and its ability to compete in the market?
**(To Guest 2)**
* How do different countries and jurisdictions handle executive compensation and severance packages, and are there best practices that Korea Zinc could learn from?
**Section 3: Corporate Responsibility and Environmental Stewardship**
**(To both guests)**
* Youngpoong claims to be reinvesting significant dividend income into environmental improvement projects.
How important is it for publicly traded companies to demonstrate a commitment to sustainable practices, and what role should investors play in promoting environmental responsibility?
**(To Guest 1)**
* Can Youngpoong’s investment in environmental initiatives be seen as a genuine commitment to corporate social responsibility, or could it be a strategic move to counter criticism?
**(To Guest 2)**
* How can companies balance their responsibility to shareholders with their obligation to protect the environment and contribute to a sustainable future?
**Conclusion:**
The future of Korea Zinc hangs in the balance as the dispute over its management and financial practices continues. We thank [Guest 1] and [Guest 2] for sharing their valuable insights on this complex issue. We hope this discussion has shed light on the challenges facing publicly traded companies in today’s environment and encouraged further dialog on the importance of ethical governance, sustainable practices, and responsible shareholder engagement.
