November 22, 2024

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[THE INVESTOR] With less than two months left for the New Year, Korea’s large conglomerates, including LG Group and Samsung Group, are preparing to carry out their annual organizational restructuring and reshuffle of top executives.

LG will likely start off by announcing some changes in its business structure as well as appointing new chief executives at some of its subsidiaries and affiliates.

It will be the first year-end restructuring and comprehensive reshuffle under Chairman Koo Kwang-mo, who took the helm in June after his father and former LG Chairman Koo Bon-moo passed away in May. 

LG Group Chairman Koo Kwang-mo (right) checks out an OLED display panel. LG Corp.

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Much attention is being paid to whether 40-year-old Koo will try to bring about dramatic changes in the nation’s third-largest conglomerate.

Earlier this month, he nominated former 3M Executive Vice Chairman Shin Hak-cheol as the CEO of LG Chem, maker of electronics and chemical materials. When the nomination is approved at a shareholders meeting on Nov. 28, it will be the first time for an outsider to head the chemical affiliate.

“LG Chem is standing at the crossroads for further grow as an innovative global firm with an upper hand in emerging segments, like batteries,” said an LG official. “The appointment of the new CEO may be linked to the company’s plans for global operations.”

Outgoing LG Chem CEO Park Jin-soo was among the seven vice chairmen under LG Group. The six others include Koo LG Corp.’s Bon-joon, Kwon Young-soo of telecom firm LG Uplus, LG Group’s Ha Hyun-hwoi, Jo Seong-jin of LG Electronics, LG Display’s Han Sang-beom and Cha Suk-yong of LG Household & Health Care.

Vice Chairman Koo, the late former chairman’s younger brother, had earlier announced that he would step down from his position later this year.

“The sitting vice chairmen, heads of their respective units, will be reviewed for their performance and their capabilities as CEOs to drive growth in new businesses,” the official said.

LG Group is reportedly trying to breath fresh air into its affiliates and subsidiaries by further attracting outsiders to lead operations.

Its crosstown rival Samsung Group usually carries out corporate restructuring and executive reshuffle in early December. It skipped the announcements in 2016 as it was mired in an influence-peddling scandal surrounding the now-impeached President Park Geun-hye. The conglomerate later announced the promotions and appointment of top executives in November last year.

Samsung Electronics, its crown jewel, is expected to promote top executives at its semiconductor division on a large scale. The division’s operating profit until the third quarter this year, at 36.8 trillion won (US$32.6 billion), accounted for 76.5 percent of the firm’s entire operating income.

In order to improve its competitiveness in the chip sector, the tech giant will likely beef up its workforce in R&D and foundry, a contract-based chip manufacturing business model.

CEOs Kim Ki-nam, Kim Hyun-seok and Koh Dong-jin, who respectively head the firm’s chip, home appliance and smartphone divisions, are likely to remain in their positions next year, according to sources.

By Kim Young-won (wone0102@heraldcorp.com)