POSCO Holdings’ Chairman Choi to hand over baton

POSCO Holdings Inc.'s Chairman Choi Jeong-woo is not among the company’s next CEO candidates, suggesting Choi will leave the company after serving two consecutive terms amid growing criticism over the company’s chief selection process.

The parent company of South Korea’s largest steelmaker POSCO said on Wednesday that its CEO candidate recommendation committee has chosen eight internal candidates for the role but incumbent CEO Choi is not one of them.    

The candidates were picked after the CEO candidate recommendation committee held a meeting earlier today to review internal applications from POSCO Group companies.  

It is not immediately known whether Choi voluntarily decided not to run for a third term but news of his absence from the candidacy list comes less than a week after POSCO Holdings came under fire for its nontransparent CEO selection process.   

Kim Tae-hyun, chairman and chief executive of the state-run National Pension Service (NPS), last week called for a new process that ensures transparency and fairness in the selection of POSCO Holdings’ next CEO. 

NPS is the largest shareholder of POSCO Holdings with a 6.71% stake.

In response to the news, Kim said on Wednesday he maintains his previous stance and will keep a close eye on the transparency of POSCO’s CEO selection process.

Incumbent Chairman Choi never officially announced his bid to run again but his indecision ignited speculation that he might run for a third consecutive term, inviting criticism from the NPS.

Given his absence from the list, however, he will relinquish his control after POSCO Holdings' general shareholders' meeting in March, the last day of his leadership.

CHOI LEADS POSCO’S SUCCESSFUL TRANSITION

Choi became POSCO Group chairman in July 2018 and managed to retain the position for a second term in March 2021.

If Choi completes his second term as expected, he will be the first POSCO Group head since the steel giant was privatized in 2000 to maintain leadership until the end of an extended term despite a change in the Korean government in the middle of it. 

Choi is credited for successfully transforming POSCO from a steelmaker into an advanced materials company by orchestrating aggressive investment in lithium-ion battery materials businesses during his five-year term.

Under his leadership, POSCO Future M won orders worth 83 trillion won ($63.5 billion) last year to supply cathodes to global battery makers.

He also successfully transformed POSCO Group into a holding entity, which is POSCO Holdings.

Despite his achievements, Choi has been out of the spotlight of Korea’s current conservative Yoon Suk Yeol government.

POSCO is Korea’s fifth-largest conglomerate but Choi has never been invited to business delegations accompanying President Yoon’s state visits to other countries.

Choi took the helm at POSCO during the previous liberal government under former President Moon Jae-in.     

THREE INSIDE DIRECTORS MAKE THE LIST

POSCO Holdings’ CEO candidate recommendation committee did not disclose a full list of the internal chair candidates but its three inside board directors – POSCO Holdings President Jeong Ki-seop, as well as Vice President Kim Ji-yong and Vice President Yoo Byeong-og – are suspected to be on the list.

The list also reportedly includes a number of executives from the group’s five key affiliates’ CEOs, including POSCO Vice Chairman Kim Hag-dong; POSCO President Lee Si-woo; POSCO E&C President Han Sung-hee; POSCO International Corp. CEO and Vice Chairman Jeong Tak; and POSCO Future M Co. CEO and President Kim Jun-hyung.

The committee said it selected the candidates after reviewing their management capacity, industry expertise and global business competency.

The eight internal nominees will go through the screening process by an outside organization, which will return the results to the committee by early next week, according to the committee.

Based on these results , the CEO recommendation committee will narrow down the internal candidate list and include it on a longer list that includes outside contenders by mid-January.

The shortlist of the final five nominees will be prepared by the end of this month, and the nominee will be picked by February, according to POSCO.

POSCO Holdings’ shares closed down 3.2% at 472,500 won apiece on Wednesday, extending their losing streak for the second straight session.  

Write to Jae-Fu Kim and Byeong-Hwa Ryu at hu@hankyung.com

Sookyung Seo edited this article.