At Samsung Electronics, Lee signals more board power in nod to investors
By Se Young Lee
SEOUL (Reuters) - Jay Y. Lee, de facto head of South Korea's sprawling Samsung Group, accelerated taking a board seat at flagship unit Samsung Electronics (005930.KS: Quote) partly because of investor pressure to improve governance, two people familiar with the matter said.
Samsung Group narrowly survived a bid by U.S. activist hedge fund Elliott Management last year to block a controversial merger of two group businesses, Samsung C&T and Cheil Industries. The deal sparked criticism that the Lee family put its interests ahead of those of shareholders.
In its latest campaign, Elliott, which owns 0.62 percent of Samsung Electronics, is calling for the world's biggest smartphone maker to be split in two, and for shareholders to be handed a 30 trillion won ($26 billion) dividend.
"Over the past couple of years, there were repeated requests from internal and external board members for Lee to join the board, which he had persistently resisted," said one of the people, declining to be named as he is not authorized to speak publicly. "But the (2015) attack from Elliott was one of the triggers that prompted him to take a board seat earlier than planned, and consider governance issues more seriously."
Samsung Electronics said in October it will respond to Elliott's latest proposals by the end of this month.
Lee, 48, the conglomerate's unassuming heir-apparent had previously orchestrated operations from behind the scenes after his father Lee Kun-hee was hospitalized in 2014 following a heart attack. He had finally been persuaded to stand for a seat on Samsung Electronics' board at next year's March shareholder meeting, people familiar with the matter told Reuters.
But the sale of the company's printer business to HP Inc (HPQ.N: Quote) required investor approval, triggering a shareholder meeting last month, and a chance to get Lee on to the board ahead of schedule.
"He felt it was time and he was ready," said the second person familiar with the issue. Continued...