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Management ethics

Kakao co-CEO nominee resigns after stock option exercise

The CEO designate exercises all his stock options on Kakao Pay last month, netting $37 million in proceeds

By Jan 10, 2022 (Gmt+09:00)

Alex Young-joon Ryu (left) was tapped as new co-CEO of Kakao Corp., alongside current Co-CEO Yeo Min-soo (right)
Alex Young-joon Ryu (left) was tapped as new co-CEO of Kakao Corp., alongside current Co-CEO Yeo Min-soo (right)

Alex Young-joon Ryu, a nominee for new co-CEO of South Korea's top mobile messenger app Kakao Corp., on Monday offered to step down, after his disposal of $39 million worth of shares in the fintech arm Kakao Pay Corp. met with strong backlash.

Ryu, chief executive of Kakao Pay, was tapped as new co-CEO of the holding company on Nov. 25, 2021, after leading the successful initial public offering of the fintech platform earlier in the month.

About a month after its stock market debut, however, Ryu and seven other executives of Kakao Pay dumped a combined 440,000 shares of the company in after-hours trade on Dec. 8, exercising their stock options. 

Ryu himself accounted for slightly more than half of the massive stock selling. He unloaded 230,000 shares in the mobile payment app for 204,017 won apiece, or 40 times more than the exercise price.

The block sale worth 46.9 billion won ($39 million) generated net proceeds of 45.7 billion won ($37 million) for Ryu, according to public disclosures.

"Our board of directors decided to accept Ryu's resignation after taking a comprehensive consideration of our crew members' opinions," the company said on Monday.

He was supposed to be officially named as Kakao's co-CEO at a March general meeting, replacing current co-CEO Joh Su-yong whose term expires in that month.

The 44-year-old CEO of Kakao Pay is also retiring from the fintech company, which appointed his successor in November last year.


The block sale of Kakao Pay shares drew harsh criticism from both its labor union and minority shareholders, questioning its management ethics.

They exercised their stock options, a week after its share price touched its highest-ever 248,500 won on Nov. 30, triggering a more than 20% decline in the share price of both Kakao Corp. and Kakao Pay since Dec. 10, 2021.

His resignation also comes as the mobile giant has been trying to improve its corporate image, withdrawing from community businesses, after it came under criticism for competing with mom-and-pop retailers. 

Kakao Pay makes a stock market debut on Nov. 3, 2021
Kakao Pay makes a stock market debut on Nov. 3, 2021


Ryu gave his apology to the company's employees in an internal meeting last week and vowed to do his best to improve the company's share value. But Kakao's labor union threatened its first-ever labor strike, calling for the cancellation of his appointment. 

Its unionized workers urged the National Pension Service, the third-largest shareholder with a 7.41% stake in the company, to veto Ryu's appointment as co-CEO.

Additionally, its labor union leader Seo Seung-wook demanded the company's founder and Chairman Kim Beom-su be held accountable for poor management ethics, if the company pushed ahead with Ryu's appointment.

Kakao co-CEO nominee resigns after stock option exercise

"Adding to the criticism from the labor union, the stock market turned the cold shoulder on the company," said an industry source. "It went against the trend toward ESG and responsible management. Chairman Kim Beom-su may not be free of the responsibility."

Kakao Pay said Ryu's disposal of all his shares in the company was aimed at preventing any possible conflict of interest after his move to the holding company.

But market analysts refuted the argument, saying Samsung Electronics Vice Chairman Jay Y. Lee and Hyundai Motor Group Chairman Chung Euisun never suffered conflicts of interest for shares they hold in their companies.

Ryu joined Kakao in 2011, then just a startup. The developer-cum-manager is regarded as a pioneer in Korea’s fintech industry for expanding KakaoPay’s offerings to encompass insurance, loans and verification services.

He is responsible for launching Voice Talk, an audio call feature within the KakaoTalk messenger app, as well as the country’s first mobile payment app KakaoPay. 

Shares in Kaka Pay closed down 2.93% at 149,000 won on Monday. Kakao Corp shed 3.4% to end at 96,600 won. 

Alipay of China is the second-largest shareholder with a 39% stake in Kakao Pay, followed by Kakao Corp.'s 47.3% stake.

Write to Ju-Wan Kim at

Yeonhee Kim edited this article.
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