 |
| Chung Mong-won, chairman of HL Group / Courtesy of HL Group |
Chung Mong-won, chairman of HL Group, has hit an obstacle because a proxy advisor here is opposed to an attempt by the construction and auto parts conglomerate to appoint him as director of the group's affiliates, explaining that there could be a conflict of interest concerning the possibility of internal transactions, according to the proxy adviser Monday.
The Center for Good Corporate Governance (CGCG) has already stated its opposition to the appointment of Chung as the in-company director of HL D&I Halla, a construction arm of the group and the auto parts subsidiary, HL Mando, at their upcoming shareholders' meetings, scheduled to be held on March 23. The reasoning is that the chairman's compensation for working as a director for both affiliates is too much.
"HL Group affiliates proposed a reappointment agenda for Chung, as an in-house director. Chung has served as the in-house director of HL Holdings, HL D&I and HL Klemove. He owns a 24.31 percent stake in the group's holding company, HL Holdings," the CGCG said adding that the internal transactions with its affiliate accounted for 43.48 percent of HL Holdings' sales over the past three years.
"HL Holdings is a beneficiary company receiving profits through internal transactions and Chung, who owns a stake in HL Holdings, is also a beneficiary. Thus, the CGCG is opposed to the item to appoint him as an in-house director," the CGCG added.
The CGCG is a research center that specializes in enhancing the governance structures of Korea's family-owned conglomerates and improving the soundness of the financial market here.
Regarding the CGCG's objective, an HL Group spokesman said "we do not agree with that opinion and the item will be decided by votes at the shareholders' meetings."
The CGCG also recommended against the approval of the proposed director's compensation for the chairman. This is because it is not reasonable to pay a significantly higher salary to the chairman compared to other directors.
HL D&I Halla has set its director's compensation limit for this year at 4.5 billion won ($3.4 million). Last year, the company paid Chung 1.46 billion won, which was about 35 percent of the total compensation paid to the eight directors.
HL Mando set its director's compensation limit at 10 billion won. In 2022, the company paid 2.46 billion won to Chung, about 53 percent of the total compensation paid to the seven directors.
![[RAS KOREA] Preserving memories at Cheongju City Archives](https://img.koreatimes.co.kr/upload/thumbnailV2/53ecc69c116c49af9ba0005288526ab5.jpg/dims/resize/178/optimize)
![[INTERVIEW] Long-awaited extension of Korean Pavilion at Venice Biennale to be pushed forward](https://img.koreatimes.co.kr/upload/thumbnailV2/d8d5090875824ce08a90bb2c5a8f8c05.jpg/dims/resize/178/optimize)
