[비즈한국] Activist fund Align Partners announced the results of this year's annual general shareholder meeting season on the 3rd. The target companies include 6 firms: DB Insurance005830, Gabia079940, SoluM248070, Coway021240, Dentium145720, and A+ Asset. The achievements claimed by Align extend beyond simple demands for dividends or share buybacks to include board entry, changes to compensation structures, and governance agreements. This is seen as a case demonstrating the extent to which the influence of activist funds can impact actual corporate decision-making during this year's shareholder meeting season.
A symbolic case is DB Insurance. Min Soo-ah, a candidate recommended by Align, was appointed as an independent director to serve on the audit committee. This is considered the first time a shareholder-proposed director candidate has been appointed at a domestic insurance company's shareholder meeting, and the first instance in a listed company with a market capitalization of over 10 trillion won that has a controlling shareholder. However, a concurrently submitted proposal to amend the articles of incorporation to reinstate the internal transaction committee was rejected, despite receiving 60.8% of the voting rights present, as it failed to meet the special resolution requirement.
At Gabia, both the non-executive director and the outside director recommended by Align were appointed, and the agenda item on 'disclosure of compensation structures for directors and key management' was passed with 61.4% support. At Dentium, a shareholder proposal to limit the director compensation cap was passed with 61.0% support.
In the case of SoluM, the matter was concluded through negotiation rather than a proxy fight. Align and the largest shareholder reached an agreement that includes the adjustment of rights related to redeemable convertible preference shares (RCPS), the composition of the board with a majority of independent directors, the appointment of shareholder-recommended independent directors, the announcement of a transition to a professional management system, and a review of a corporate spin-off.
Conversely, shareholder proposals were ultimately rejected at Coway and A+ Asset. However, in the case of Coway, Align noted that its recommended candidate, Park Yoo-kyung, received 50.1% support from shareholders present, and that the shareholder proposal to appoint an audit committee member at A+ Asset also received majority support from general shareholders.
Looking at the results of this shareholder meeting season, the methods used by activist funds are changing. Rather than sticking to past demands for dividend hikes or share buybacks, the scope has expanded to agendas that directly target management structures, such as audit committee appointments, board composition, disclosure of compensation systems, setting compensation caps, and adjusting rights on preferred shares. At Gabia, a consultative shareholder proposal submitted after a court ruling was passed, and at Dentium, a shareholder proposal on director compensation caps was approved. At SoluM, a comprehensive agreement was reached before the shareholder meeting proxy fight even took place.
However, the limitations were also clear. As seen in the DB Insurance case, changes to the articles of incorporation that require special resolutions may not clear the threshold despite high approval rates, and in companies with strong controlling shareholders or friendly stake structures, like Coway and A+ Asset, the support of general shareholders may diverge from the final voting results.
While Align's performance this shareholder meeting season proves that activist funds are no longer just peripheral factors, it also highlights that, in order to truly change the governance of domestic listed companies, voting structures, requirements for amending articles of incorporation, and the influence of major shareholders remain even greater variables than the shareholder proposals themselves.