Vice Chairman Han apologizes to Samsung Electronics shareholders

Tech

Published: 16 Mar. 2022, 18:18 Updated: 16 Mar. 2022, 19:29

Vice Chairman Han apologizes to Samsung Electronics shareholders

Samsung Electronics Vice Chairman Han Jong-hee speaks at the 53rd annual shareholders meeting on Wednesday morning at the Suwon Convention Center in Gyeonggi, where he apologized for a series of mishaps and promised to restore shareholder value. [YONHAP]

Samsung Electronics Vice Chairman Han Jong-hee apologized to shareholders Wednesday as Korea's largest company deals with a falling stock price, customer complaints, manufacturing problems and labor issues.

To bring the point home, he left the podium and bowed to the assembled stockholders.

"We apologize once again for having failed to properly address customers needs from the start," Han said.

Samsung Electronics held its 53rd annual shareholder's meeting on Wednesday morning at the Suwon Convention Center in Gyeonggi.

Three items were put to the shareholders — approval of the annual report, the election of board members and auditors and a payment limit for board members — and despite the general sense of discontent, all items on the agenda passed.

At the center of the storm is an app installed by default on devices from Samsung Electronics that slows the performance of processors when users run data-heavy apps like games.

Thousands of disgruntled Galaxy users in Korea are threatening a class action suit against Samsung Electronics, seeking 300,000 won ($242) per user as compensation. A Naver-hosted community is organizing the group, and 7,600 people had joined the community as of Wednesday afternoon.

Over 1,500 people have joined the suit as of Monday, according to a representative of the group.

Following the harsh reaction from users, Samsung Electronics rolled out a new software update allowing the Game Optimizing Service (GOS), as the app is called, to be disabled by users.

Han took time at the meeting to explain the origins of the problem.

The GOS app did intentionally cut down data processing speeds of processors, but to prevent overheating while game apps are running because "the GOS app is intended to optimize the performance of phones by taking into account the different characteristics of games," according to Han.

"We will heed the calls of customers better to make sure that the same issue does not happen again," Han said. "We will make amends by prioritizing customer experience and providing quality products and services."

Samsung Electronics' 53rd annual shareholders' meeting is being held at the Suwon Convention Center in Gyeonggi on Wednesday morning. [NEWS1]

During the meeting, Kim Han-jo was recommended to replace Bahk Jae-wan as the chairman of the board. Two independent directors, Han Wha-jin and Kim Jun-sung, were newly added to the board. For executive directors, Kyung Kye-hyun, Roh Tae-moon, Park Hark-kyu and Lee Jong-bae were suggested. Kim Jeong was up for reelection.

All three items were successfully passed, even though shareholders had been threatening to vote against the election of Roh as a member of the board.

Roh is head of mobile experience business and blamed for the GOS issue by consumers. Angered investors have been posting pictures online of ballots with votes against Roh. He was elected with a 98-percent approval.

After the meeting, some users in the Samsung Members community expressed discontent online, saying that Samsung Electronics gave insufficient answers to shareholders.

They pointed out that Roh should have come forward himself to explain the GOS incident in detail, and blamed Han for giving half-hearted answers and being light on detail.

Han said that phones will be kept from overheating with a temperature-adjusting algorithm "that does not hinder smartphone performance," with no further explanation.

"We will make our best efforts so that the company grows and our products sell well," he said during the meeting.

Roh has apologized to the company employees, but not to consumers.

"You really call this an apology?" read one post.

"It's my fault for believing that I would get something out of the meeting today," read another.

Both were posted Wednesday after the meeting.

Other concerns addressed by shareholders included chip problems, the falling stock price and a possible strike.

Samsung Electronics struggles with semiconductor yield problems and may also be facing the first-ever walkout in its 52-year history if negotiation Friday fail.

Kyung, the head of the device solutions division, said that the company expects better chip output in the coming years.

"Time was needed for ramping up the business in the beginning, but it is gradually stabilizing," he said.

"We are cooperating with Qualcomm on multiple levels and we expect for more."

Samsung Electronics' shareholders take part in an annual meeting at the Suwon Convention Center in Gyeonggi on Wednesday morning. [YONHAP]

The company's stock price has been weak since the beginning of the year, shedding more than 10 percent over the last three months. This has angered retail investors, who rage at the company for giving out generous bonuses to company employees as the stock falls.

On Wednesday, it closed at 70,400 won, up 1.3 percent.

The company will introduce a new model in the affordable Galaxy A line during an online event on Thursday and will sit down at the bargaining table with its union on Friday.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]