Proxy advisor ISS recommends KT&G investors back activists director nominees

March 17, 2023 03:31 AM AEDT | By Reuters
Follow us on Google News:

By Svea Herbst-Bayliss

NEW YORK, March 16 (Reuters) - Proxy advisor Institutional Shareholder Services (ISS) on Thursday urged investors in Korean tobacco conglomerate KT&G to elect director candidates nominated by two activist investors and support their proposals to return more cash to shareholders.

KT&G, previously known as Korea Tobacco & Ginseng, is facing pressure from Flashlight Capital and ANDA Asset Management who are pushing the company to announce bigger dividends and additional share buybacks, spin off the ginseng business, and optimize its balance sheet. The two investment firms are not working together.

ISS said investors should elect Flashlight Capital's two nominees Suk-Yong Cha and Ou-Jin Hwang and they should also back Doreen Kim, one of the three candidates suggested by ANDA.

Given "our support for the dissident's share buyback and dividend proposals, the election of three additional directors with relevant consumer, marketing, supply chain and capital allocation experience is the right path forward," ISS wrote.

ISS noted that the company's stock price has underperformed peers and has fallen more than 10% since an investor day in January.

Flashlight Capital, founded by former Carlyle Group executive Sanghyun Lee, wants the company to raise its dividend and increase the frequency of payouts to once a quarter from once a year, among other proposals. ANDA is also pushing the company to increase the size of its board to 10 members from eight.

"Shareholders have suffered for too long," Lee said in a statement, adding he is pleased that ISS recommended that investors vote for all ten of his firm's proposals.

Large investors often follow the recommendations of proxy advisory firms including ISS and its smaller rival Glass Lewis. First Eagle Investment Management, BlackRock and Vanguard Group rank among KT&G's biggest investors. The meeting date is scheduled for March 28.

(Reporting by Svea Herbst-Bayliss;Editing by Elaine Hardcastle)


The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK