Vice Chairman Shin Hak-cheol of LG Chem to Extend Term by Two More Years... Expectations for a CEO Approaching His 70s

[Korea Financial Times, Gwak Horyung] ​Shin Hak-cheol, the last remaining CEO in LG Group born in the 1950s, is expected to extend his term by up to two more years. LG Chairman Koo Kwang-mo seems to have determined that an experienced executive is necessary to navigate the ongoing slump in both petrochemicals and battery sectors.

LG Chem will hold its 24th annual general shareholders' meeting on March 24 at the LG Twin Tower in Yeouido, Seoul.

Four director reappointments have been proposed for the meeting. The board has recommended reappointing Vice Chairman Shin Hak-cheol as an inside director and Vice Chairman Kwon Bong-seok, COO of LG Corp., as a non-executive director. Additionally, the reappointment of two outside directors—Professor Cho Hwa-soon from Yonsei University’s Department of Political Science and Diplomacy and Professor Lee Hyun-joo from KAIST’s Department of Biological and Chemical Engineering—will also be reviewed.
Shin and Kwon are the only two vice chairmen within LG Group. When Chairman Koo Kwang-mo took office in June 2018, there were six vice chairmen, but all have since stepped down. Shin and Kwon were directly appointed by Chairman Koo.

Unlike Vice Chairman Kwon, who was promoted internally, Vice Chairman Shin was recruited externally from 3M to LG Chem in November 2018. The following year, he officially took office as CEO of LG Chem and has led the company for six years.

A notable aspect of Shin’s reappointment is his two-year term. The other director candidates in this year’s LG Chem shareholders’ meeting are being appointed for three-year terms. LG typically sets board member terms at the statutory maximum of three years, and Shin's previous two terms were also three years each. While inside directors’ terms are not strictly guaranteed, making term differences less significant, the distinction in Shin’s case stands out.

This adjustment seems to reflect Shin’s age, as he was born in 1957 and is currently 67 years old. By the end of his new term in 2027, he will reach the age of 70.

Shin’s primary task is to restructure LG Chem’s business portfolio. He was recruited externally as a “materials expert” to reduce LG Chem’s reliance on petrochemicals and aggressively invest in three new key businesses—batteries, eco-friendly materials, and pharmaceuticals.

However, LG Chem currently faces difficulties in making aggressive investments. In 2024, LG Chem recorded a consolidated operating profit of KRW 917 billion, a 64% decline from the previous year. The petrochemical downturn has lasted longer than expected, and battery materials, which were nurtured as a substitute, are struggling due to EV chasm, a temporary slowdown in electric vehicle demand.

Shin remains firm in his commitment, stating, "Even with a demand slowdown, we will not neglect long-term R&D or the establishment of global cathode production bases."

With limited financial resources, shareholder returns have inevitably shrunk. The board has decided on a dividend of KRW 1,000 per common share for last year. Compared to the high-dividend policy from 2020 to 2022, which was implemented following the spin-off of LG Energy Solution, this represents a tenfold reduction.

Gwak Horyung (horr@fntimes.com)