Korean Air chair's reappointment opposed by National Pension Service

Korean Air chairman Walter Cho [KOREAN AIR LINES]

The National Pension Service (NPS), the second-largest shareholder of Korean Air, voiced its opposition of the reappointment of Korean Air and Hanjin KAL chairman Walter Cho as a board member of the airline company.

The pension service with a 7.61 percent stake in Korean Air said Thursday it will vote against the reappointment during an annual general meeting set for next Thursday.

The NPS cited concerns regarding Cho's "failure to monitor acts against the interest of shareholders" as its grounds for opposition.

The decision to oppose the reappointment was reached during the fourth meeting of the NPS Fund Trustee Responsibility Committee held Thursday afternoon, where they deliberated various items on the agenda, including Korean Air's shareholders meeting.

The NPS also decided to cast dissenting votes on this year's compensation for board directors, expressing concerns over the "excessive remuneration compared to performance."

Cho's total compensation amounted to 81.6 million won ($61,400) last year, marking a 57.3 percent increase compared to the previous year, according to the 2023 annual reports of Korean Air and Hanjin KAL. This compensation included 39.2 million won from Korean Air and 42.4 million won from Hanjin KAL.

However, the NPS's influence may be limited by the dominance of Hanjin KAL, Korean Air's holding company and largest shareholder with a 27.02 percent stake. Should the appointment pass, Cho's term will be secured for three years.

Following the NPS's announcement, Hanjin KAL's stock saw a significant drop on Friday.

Hanjin KAL's stock closed at 59,100 won as of Friday, a 16.64 percent decrease compared to the previous trading day.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]