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SM Entertainment Holds 28th Annual General Meeting of Shareholders and the New Board Appoints Cheol-hyuk Jang as CEO

  • Friday, March 31, 2023, 8:00 pm

"Laying the Foundation to Move Forward to a Fan and Shareholder-centric Global Entertainment Company"

-  SM shareholders approve all Board proposed agendas including the appointment of Registered Directors, a partial amendment of the Articles of Incorporation, and a cash dividend payment of KRW 1,200 per share

-  In order to respond to the rapidly changing market environment and implement mid- to long-term corporate strategies, the board of directors appointed Cheol-hyeok Jang as the CEO.

-  Expectations are rising as SM successfully laid the groundwork to move forward to a fan and shareholder-centric global entertainment leader

SEOUL, South Korea, March 31, 2023 /PRNewswire/ -- On Friday, SM Entertainment ("SM" or the "Company") (KRX:041510) announced that all agendas proposed by the Company's Board of Directors(BOD) were approved by its shareholders at the 28th Annual General Meeting of Shareholders(AGM) held at SM headquarter in Seongsu-dong, Seoul. With this, the foundation has been laid for implementing the SM 3.0 strategy, an essential element for the Company to move forward to a fan and shareholder-centered global entertainment company. 

Agenda items discussed at the AGM are as follows: (i) approval of the financial statements of the fiscal year 2022 and provision of dividends, (ii) partial amendment to the Articles of Incorporation(AOI), (iii) appointment of Registered Directors including Inside Directors, and (iv) approval of Directors and their compensation limits.

First, shareholders voted to approve the proposed cash dividend payment of KRW 1,200 per share as proposed. SM has significantly increased the cash dividend to establish an advanced capital deployment and shareholder return policy as the Company is expected to achieve record-high earnings for the fiscal year 2022 from its main businesses.

All the AOI amendment proposals were approved, including the establishment of sustainable governance, strengthening the BOD's independence and responsibilities, and enhancement of shareholder value. The proposed amendments to the AOI, including (i) correction of typographical errors and amendment of laws and regulations, (ii) introduction of an electronic voting system to enhance shareholder rights, (iii) restriction of eligibility for director positions for those who have been sentenced to a fine or more for embezzlement and breach of trust within three years, (iv) statement of Directors' duties of loyalty, fidelity, and confidentiality, (v) separation of the CEO from the Chairman of the Board, adjustment of the procedures for convening the BOD and the principles of board composition (vi) establishment and organization of committees within the BOD, (vii) appointment of a compliance officer and establishment and operation of compliance control standards, have been reflected and are expected to meet the purpose of protecting shareholder rights and improving governance.

As for the Registered Directors, all ten candidates proposed by the Board of Directors were appointed, including Cheol-hyuk Jang, Chief Financial Officer (CFO) of SM Entertainment, Ji-won Kim, Head of the SM Entertainment Marketing Center, and Jung-min Choi, Head of the SM Entertainment Global Business Center as Inside Directors.

Five candidates for Outside Director were appointed, including Kyu-shik Kim, Chairman of the Korean Corporate Governance Forum, Tae-hee Kim, Attorney at Pyeong San Law Firm, Jung-bien Moon, Professor at Korea University Business School, Seung-min Lee, Partner at Peter & Kim, and Sung-moon Cho, CEO of Chartmetrics, as well as the two new candidates for Non-executive Director, Chang-hwan Lee, CEO of Align Partners, and Yoon-joong Jang, EVP and Global Strategy Officer at Kakao Entertainment.

SM's active Inside Directors as of March 31st decided to step down without serving consecutive terms to take responsibility for former Executive Producer Soo-man Lee's mismanagement of the Company. As such, SM has composed a new BOD with the highest level of independence, diversity, and expertise in Korea.

In addition, the compensation limits for Directors and auditors were approved as proposed at KRW 6 billion and KRW 200 million respectively, the same as previous fiscal year.

Following the AGM, the new BOD called for Board of Directors meeting and appointed Inside Director Cheol-hyuk Jang as its new CEO.

Jang Cheol-hyuk is a finance, accounting, and M&A expert with excellent capabilities and qualified experience required for improving financial efficiency and making sound investment decisions. He joined SM as a CFO in 2022 and has been responsible for accounting, tax, finance, and IR affairs, contributing to improving corporate management performance and governance. Having been at the center of the SM 3.0 transition drive coupled with his track record, the Board found him the right person to effectively respond to the rapidly changing domestic and international market environment and faithfully implement mid- to long-term corporate strategies.

Jang has worked for global accounting firms KPMG and PwC for 13 years, specializing in accounting audits, corporate acquisition, and spin-off, deal due diligence, and corporate valuation. He oversaw Body Friend's overseas business and led the establishment of Shanghai and LA subsidiaries and store openings, setting up overseas branches, and B2C and B2B sales. He also served as CFO of Skin Food and Dong-A Tanker, working on organizational improvements to turn around insolvent companies.

Jang stated, "I feel a great responsibility to assume the position as a CEO when SM is about to take a big leap forward with SM 3.0." He added, "We will establish a sound that transparent governance structure and faithfully implement the SM 3.0 strategy so that SM can become a fan- and shareholder-centered global entertainment leader while continuing to communicate closely with our artists, fans, shareholders, and employees."