KT to name final CEO candidate next week amid management vacuum

[Photo by Lee Chung-woo]

KT Corp., one of South Korea’s three telecommunications providers, is set to select the final candidate for its next chief executive officer by Aug. 4.

Since April, KT has been facing a management vacuum with the CEO position vacant. Attention is now focused on whether it will be able to find a new leader who can clean up the internal turmoil and lead the 25 trillion won ($19.5 billion) conglomerate.

According to an industry source on Thursday, KT plans to select a finalist for the CEO position on Aug. 3 or 4. A total of 27 people applied for the CEO position either directly or were nominated by shareholders through an open recruitment process that lasted until July 12. Additionally, including 11 internal candidates at the vice president level or above at KT, the number of potential CEO reaches as many as 38.

On Thursday, KT conducted online interviews with around 30 applicants and shortlisted about 4 candidates for the final interviews. The shortlisted idates are expected to be interviewed together on Aug. 3 or 4 to ensure the fairness of the selection process, according to the source.

Once the final candidate is determined by Aug. 4, the candidate will be appointed as the next CEO through a vote at the shareholders’ meeting scheduled for late August. The appointment criteria at the shareholders’ meeting are more than 60 percent of the voting shares present and approval rate of more than 25 percent of the total shares. As of the end of March, KT’s largest shareholder was the National Pension Service with an 8.27 percent stake, followed by Hyundai Motor Group with a 7.79 percent stake, and Shinhan Bank Co. with a 5.57 percent stake. Foreign shareholders reportedly held around 40 percent of the shares, and individual shareholders around 35 percent. A KT official explained that since KT is also listed on the New York Stock Exchange (NYSE), it would take a minimum of three weeks to inform U.S. shareholders, which is why the shareholders‘ meeting cannot be held until late August at the earliest.

Previously, KT’s former CEO Ku Hyeon-mo had sought a second term since November last year but gave up his bid in February amid backlash from the ruling party and the presidential office, which accused the former CEO of abusing his management power despite having no stake in the company. Afterward, Yoon Kyung-lim, head of KT’s transformation division and a close associate of the former CEO, was selected as the final candidate for the next CEO, but he also withdrew from the race midway. KT has been under an acting CEO since late March and has been without a CEO since April, leading to a management vacuum that has delayed major investments and personnel changes.

Ahead of the appointment of the next CEO, KT paid performance bonuses to existing executives. It is believed that when the next CEO is appointed in September, a major shakeup of executives will take place, so the performance pay was paid before then.

According to an analysis by Maeil Business Newspaper of data from the Financial Supervisory Service’s electronic disclosure system, 97 KT executives received a combined total of 132,229 shares worth 4 billion won as of July 21. On average, each executive received about 1,363 shares worth about 40 million won, which is similar to the performance bonuses they received in 2022. Lee Sung-hwan, senior executive and head of customer headquarters at KT West, received the largest number of shares, with 2,865 shares. Shin Hyun-ok, vice president and head of KT’s management support division, known as a close associate of the former CEO, received 1,985 shares. KT explained that the performance bonuses were paid in accordance with internal regulations.

Industry insiders say that a weighty figure is needed to shake up and lead KT, a giant group with revenues of 25 trillion won. “As KT operates businesses in various fields such as telecommunications, finance, cloud services, satellite communications, and content, someone who can withstand external pressure from the political circle and present a vision for the future is needed,” said an industry insider.

Meanwhile, since its privatization in 2002, five people have served as CEOs of KT: Lee Yong-kyung, Nam Joong-soo, Lee Suk-chae, Hwang Chang-kyu, and Ku Hyeon-mo. Of these, Hwang is the only one to have completed his term. This shows that the KT CEO has not been free from political influence. All of the former KT CEOs attended Seoul National University, with two majoring in electronic engineering, two in business administration, and one in industrial engineering. Three of the five are from inside KT and two are from outside.