Lotte Corporation publishes FY2025 Corporate Governance Report: enhanced shareholder returns (≥35% payout ratio, stock retirement) and continued efforts for board independence, but still non-compliant on 4-week AGM notice
Lotte Corporation reaffirmed its mid- to long-term shareholder return policy (2024-2026) in the FY2025 Corporate Governance Report. The target shareholder return ratio (dividends + share buyback/retirement) is at least 35% of separate net income, and it decided to retire treasury shares on March 11, 2026.
The 2025 year-end dividend was 1,250 KRW per common share (total 95.06B KRW) and 1,300 KRW per preferred share (total 12.09B KRW), increasing from the prior year. The record date is set after the dividend amount is confirmed (AGM date), providing predictability.
The board consists of 4 independent directors and 3 inside directors (57.1% independent), including 2 female directors (29%). However, the board chairman is also the CEO (Shin Dong-bin), raising independence concerns.
The company provides AGM notice only 2 weeks in advance, non-compliant with the recommended 4-week standard for listed companies. It cites difficulty in preparing consolidated financial statements but promises improvement.
The audit committee comprises all three independent directors, holding separate meetings with external auditors without management at least quarterly. The internal accounting control system received an unqualified opinion from Samjong KPMG.
A CEO succession policy is in place, with a GIANTs leadership program for 28 CEO candidates. The articles of incorporation specify a succession order in case of emergency.
The company disclosed its corporate value-up plan (Value-Up) in November 2024 and March 2026, with board review and approval. It conducted NDRs and IR Days for institutional investors in 2025-2026, communicating the plan.
[AI Comprehensive Analysis]This regular governance report shows positive steps in shareholder returns and board independence, but issues like non-compliance with AGM notice period and combined CEO/chairman roles remain. The short-term stock price impact is neutral.