SM Entertainment ups dividend after letter from shareholder
SM Entertainment will return more than 20 percent of its net profit to shareholders for the next three years, the K-pop company said Wednesday.
In a board meeting held Sunday, the company agreed to spend 20 percent or more of its net profit as year-end dividends for shareholders or to buy back its own stock to increase shareholder value, starting in March, in a general shareholder meeting.
The board also approved the formation of a provisional committee that will recommend three additional outside directors to the board.
Three members were appointed to the committee: CEO of SM Entertainment Lee Sung-soo; Cho Myeong-hyeon, a professor at Korea University Business School; and Lee Nam-woo, a visiting professor at Yonsei University's Graduate School of International Studies.
“We are looking forward to accelerate board-centered management by recommending independent and reasonable candidates for outside directors along with the temporary committee members,” the company said.
The announcement comes as a part of the agency's effort to comply with an letter from Align Partners Capital Management, which owns 1.1 percent of SM Entertainment, sent last December. SM Entertainment promised earlier this month that it will increase the number of outside directors from one to four and make its dealings with subsidiaries more transparent.
The company will also introduce a multi-production system where it does not rely solely on its founder Lee Soo-man's musical capabilities but establish multiple production lines to maximize sustainability.
Details will be announced at noon on Feb. 3 on SMTOWN YouTube channel and the company website.
BY YOON SO-YEON, SEO JI-EUN [seo.jieun1@joongang.co.kr]
with the Korea JoongAng Daily
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