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Shareholder meetings go online, driven by the virus

Mar 16,2020
Impassioned speeches and shareholder scrums could become things of the past as companies move to hold their annual meetings online.

With the coronavirus making it all but impossible to put so many people in one room, most major companies are exploring or implementing electronic alternatives.

The systems will be tested in real time this week as 300 shareholder meetings are held, with some of Korea’s largest companies scheduled for their yearly gathering of company owners.

It will be a stress test for some. The move online comes as a number of companies face the possibility of heated proxy fights.

SK Telecom will be holding an online shareholder meeting later this month, its first ever. Shareholders can participate via smartphone or personal computer.

The company said in a statement issued Sunday that shareholders will be able to ask questions directly to the executives.

Starting 9 a.m. today, shareholders will be able to register to watch the video live and remotely take part in the March 26 meeting. As in conference calls, each of them will receive a registration code for access.

Online participants can exercise their voting rights on SK Telecom’s homepage between March 16 and 25.

KT is also adopting online voting for the first time. In the past, the company has polled shareholders by mail, but this is the first time it will be doing so electronically.

On the agenda this year is the approval of Koo Hyun-mo as the new CEO.

KT shareholders need to register to gain access to the system, and they can cast their votes up to 10 days ahead of the meeting, which is being held on March 30.

The coronavirus raises some practical concerns for publicly-listed corporations. In a survey conducted by the Korea Chamber of Commerce & Industry, more than three in 10 respondents said they were concerned about achieving a quorum at upcoming shareholder meetings.

Electronic voting is a well-established but little-used practice for Korean public companies.

According to the Korea Securities Depository, 63 percent of Kospi and Kosdaq companies have signed contracts allowing for the use of electronic voting. But only about 5 percent actually utilized such systems last year.

On the investor relations site of Samsung Electronics, a pop-up notice appeared on Sunday urging shareholders to vote from home due to safety concerns. Its annual meeting is scheduled for Wednesday.

The adoption of electronic voting is a first for Samsung Electronics as well.

Last month, the company made a decision to change the location of the annual event, from its office building in the bustling Seocho District in southern Seoul to a spacious convention hall in the city of Suwon, Gyeonggi.

This is the first time the electronics and chipmaker will hold the session outside the office.

The Samsung Electronics shareholder meeting attracted more than one thousand people last year, with some having waited hours to enter the Seocho office building.

The Suwon convention center is twice the size of the Seocho office, but Samsung said in its Sunday notice that shareholders with a fever will be sent to a separate room next to the hall.

A total of 12 Hyundai Motor Group companies will introduce electronic voting this year, including Hyundai Motor, Kia Motors and Hyundai Mobis.

CJ Group and Posco Group will also introduce electronic voting at more of their related companies after partially introducing the practice in previous years.

Hyundai Engineering & Construction, Hyundai Department Store Group and Hanmi Pharmaceutical Group are among the Korean companies that will undertake electronic voting for the first time this year.

Questions remain as to whether electronic voting is as good as the traditional, in-person meetings.

“It may resolve the issue on quorums, but from the perspective of individual shareholders, it’s practically difficult to decide how they will exercise their voting rights solely based on the reports companies offer,” said Shin Hyun-han, a finance professor at Yonsei University.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]


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