KT&G’s current CEO compensation has been ‘inversely correlated’ with stock price

Flashlight Capital Partners Pte. Ltd (“Flashlight Capital”), a significant shareholder of KT&G Corporation (KRX: 033780) (“KT&G” or the “Company”), today demanded a revision of KT&G’s CEO compensation plan to normalize stock price.

“In the recent past, KT&G’s former CEO was awarded a significant amount of compensation despite a 21% drop in KT&G’s stock price, while the KOSPI index surged by 27%," remarked Sanghyun Lee, Managing Partner of Flashlight Capital. "In March 2024, we urged the KT&G board to link the CEO compensation to stock performance, but no action has been taken so far," Lee added.

Under the new plan proposed by Flashlight Capital, the CEO will receive a base annual pay of KRW100 million and be granted shares based on stock price milestones over the next three years. For instance, if the stock price doubles, the CEO will be awarded shares worth KRW10 billion.

“Many of the current KT&G board members are under police investigation for potential bribe charges,” Lee highlighted. “Given that KT&G's stock price is over a 50% discount compared to industry peers, we believe doubling the stock price is highly achievable, provided the board act promptly and decisively,” Lee emphasized.

Flashlight Capital proposed an Extraordinary General Meeting (EGM) for shareholder approval and requested a response from the KT&G board by the end of July.

About Flashlight Capital

Flashlight Capital Partners Pte. Ltd is an investment management firm founded by the Carlyle Group’s former Head of Korea, Sanghyun Lee. Flashlight Capital is dedicated to strengthening corporate governance and enacting transformative change to its portfolio companies, and launched KT&G campaign since 2022. For more information about Flashlight Capital, please visit www.FlashlightCap.com.

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