VIP Asset Management, the second-largest shareholder (15.64%) of KOSDAQ-listed Woldex (101160.KQ), scored a sweeping victory after leading opposition to management's proposals at the company's extraordinary general meeting.
According to the financial investment industry on Tuesday, all three proposals put forward by management, including approval of director compensation limits, were rejected at Woldex's extraordinary general meeting held Monday. In particular, even "Proposal 2-1 (director compensation limit excluding CEO Bae)," which had been expected to pass because CEO Bae Jong-sik (34.8% stake) could exercise voting rights, was rejected as 94.7% of minority shareholders opposed it. This marks a 25.5 percentage point surge in the opposition rate compared with this year's regular general meeting (69.2%). The result came as domestic and foreign institutional investors, including Norway's sovereign wealth fund, along with individual shareholders, aligned with VIP Asset Management's position.
VIP Asset Management explained that opposition votes piled up because proposals rejected at the regular general meeting were resubmitted without substantive revisions, and public sentiment worsened as the company excluded electronic voting and held this extraordinary meeting in Gumi, North Gyeongsang Province, severely restricting shareholder participation. On top of this, discontent over corporate governance compounded the situation, including a low dividend payout ratio averaging just 2.3% over three years, a board structure in which three of four inside directors are direct family members, and the appointment of outside directors lacking expertise.
"Shareholders who objected to the exclusion of electronic voting actively delegated their voting rights," said Kim Min-kook, CEO of VIP Asset Management. "This result reflects the will of shareholders who want to check the major shareholder's arbitrary control and demand fundamental change in corporate governance."
Woldex, which suffered a crushing defeat in this proxy battle, now faces a greater likelihood of having to prepare new proposals and convene another extraordinary general meeting. The company has also been left with the task of rebuilding shareholder trust to secure the reappointment of CEO Bae and Vice President Bae Young-soo, whose terms expire early next year.
VIP Asset Management called for Woldex to present a comprehensive improvement plan covering its compensation system, board composition, and shareholder returns. Earlier, it had also proposed buying back and canceling at least 20 billion won worth of treasury shares this year, and returning more than 40% of annual net profit to shareholders from next year onward.
"Executive compensation should be linked to objective performance such as total shareholder return (TSR)," Kim said. "Shareholders are not opposing the compensation amount itself, but a compensation system in which the CEO sets pay at his own discretion regardless of performance."
