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Speaking up for value-up: Retail investors make presence felt at shareholder meetings

Published: 15 Apr. 2025, 15:36 Updated: 15 Apr. 2025, 18:07

An annual shareholders meeting of retail conglomerate Emart held on March 26 in central Seoul [JOONGANG ILBO]

One of the defining features of this year’s shareholder meetings has been the growing voice of retail investors.

The trend is driven by value-up policies aimed at boosting corporate value, as well as the rise of online organizing platforms. The percentage of minority shareholders accounted for 50.7 percent of all shareholder proposals at listed companies last year — nearly double the 27.1 percent recorded in 2015, according to media reports.

Observers are now watching to see whether increasingly active retail shareholders can disrupt the traditionally quiet shareholder meetings.

Around 60 shareholders were in attendance at Emart’s annual general shareholder meeting held in central Seoul on March 26.

On that day, Emart became the first major listed company in Korea to formally present a “recommendatory shareholder proposal” submitted by a coalition of small shareholders. The proposal called for the hypermarket chain to re-announce its value-up plans and disclose progress on a quarterly basis.

A recommendatory shareholder proposal, even if approved at a shareholder meeting, is not binding and does not legally obligate management to implement it — a fact that has sparked debate over whether such proposals should be added to the agenda at all.

Although only 25 percent of votes were cast in favor — leading to the proposal’s rejection — Emart was still praised for engaging with shareholder concerns by putting the proposal up for a vote. CEO Han Chae-yang, who presided over the meeting, responded in detail to every shareholder question and comment. The meeting, which typically concludes within 30 minutes, lasted about an hour this year.

An annual shareholders meeting of retail conglomerate Emart held on March 26 in central Seoul [JOONGANG ILBO]

“The management seemed noticeably more tense this time, likely because the shareholders who submitted the proposal were present," said a shareholder in his 60s surnamed Kim, who said he has attended Emart’s shareholder meeting for three consecutive years. "What small shareholders do may feel like striking a rock with an egg, but I believe it will make a difference someday.”

Smaller firms have already seen several “minority shareholder revolts.”

At the shareholder meeting of biotech firm Oscotec held on March 27, a motion to reappoint founder and CEO James Kim was voted down. The backlash was led by small shareholders angered by the company’s plan to list its subsidiary, Genosco, separately. In February, shareholders of Kosdaq-listed Amicogen ousted founder Shin Yong-chul from the board at an extraordinary general meeting.

Both companies had relatively low controlling shareholder stakes, in the 12 percent range.

There is growing discussion among platforms like ACT and HeyHolder — which help coordinate retail investor efforts — about the need to ease the requirements and documentation procedures for submitting shareholder proposals.

An illustration of an ant, as small minority shareholders are often referred to in Korean, holding its phone [JOONGANG ILBO]

Currently, a shareholder must hold at least 3 percent of a company’s shares to submit a proposal. Those who have held shares for six months or more can do so with a 1 percent stake, and in companies with capital over 100 billion won ($70 million), the threshold is 0.5 percent.

However, shareholders must submit proof of their holdings and duration, and retail investors argue that companies should adopt electronic systems to facilitate that process.

On the other hand, industry groups warn that increasingly aggressive demands from minority shareholders could disrupt long-term corporate growth.

“Small shareholders often push for short-term returns like dividend increases or share buybacks,” said one industry representative, “which can make it harder for companies to carry out mergers and acquisitions or invest in facilities.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY KIM KI-HWAN, CHOI SUN-EUL, NA SANG-HYEON, NOH YU-RIM [[email protected]]