LG Chem Publishes 2026 Corporate Governance Report... Strengthening Shareholder Return Policies and Rejecting Shareholder Proposals to Maintain Governance Stability
Complied with 14 out of 15 corporate governance key indicators (electronic voting, avoiding concentrated meeting dates, independent director as chairperson, etc.); cumulative voting exclusion clause removed effective September 2026
Shareholder proposals including advisory shareholder proposal introduction (30.3% in favor) and senior independent director appointment (22.7% in favor) were rejected; 3 related proposals automatically withdrawn
FY2025 dividend: common shares KRW 2,000, preferred shares KRW 2,050 (payout ratio consolidated 0%, separate 11.5%) - decided for shareholder return despite no distributable profit
Mid-to-long-term shareholder return policy: target consolidated payout ratio of 30% when ROE exceeds 10% and LG Energy Solution dividends normalize; plan to gradually monetize LG Energy Solution stake to ~70% and use 10% of after-tax proceeds for shareholder return
Board composition: 7 members (2 inside, 4 independent, 1 other non-executive), 2 out of 4 independent directors are female, all audit committee members are independent directors, board chairperson is independent director (Cho Hwa-soon)
External auditor: Samil PwC (designated for 2024-2026); quarterly meetings with external auditors without management attendance
Internal controls: CRO appointed, enterprise risk management organization, ISO 37001/37301 certified, internal accounting control system deemed effective
No designation as unfaithful disclosure entity; selected as excellent disclosure company for 2025
Corporate value-up plan: target 3x growth in revenue from 4 growth engines (high-value specialty, sustainability, battery/electronic materials, oncology) by 2030; disclosed capital allocation principles
[AI Comprehensive Analysis]LG Chem maintains high transparency and independence in overall governance, while demonstrating commitment to shareholder return by maintaining dividends despite consolidated net loss. However, rejection of shareholder proposals highlights some limitations in shareholder engagement. Further shareholder value enhancement efforts, such as share buybacks funded by LG Energy Solution stake monetization, are needed.