The pharmaceutical industry is expected to witness significant changes in management at upcoming shareholders’ meetings starting from Friday.
Samjin Pharmaceutical, LG Chem, Boryung Pharmaceutical, and Donghwa Pharm are drawing particular attention as they are preparing to change CEOs.
Samjin CEO Lee Sung-woo, the longest-serving CEO in the pharmaceutical sector, will wrap up his 18-year lead of the company due to his old age.
After taking key posts at the sales department, Lee took the helm in 2001. He set a new record of being elected as CEO for six consecutive terms.
Samjin Pharm Vice President Jang Hong-sun and Vice President Choi Yong-ju are floated as the possible successor of CEO Lee. The company has already proposed the agenda of appointing Jang and Choi as internal directors. It will make the final decision on internal directors and the new CEO at the general shareholder’s meeting and the meeting of board directors on March 22.
LG Chem plans to appoint CEO and Vice President Shin Hak-cheol, a former vice chair of 3M, as an internal director.
After then Vice Chairman and CEO Park Jin-soo decided to retire late last year, LG Chem named a CEO from outside the company for the first time in the company’s history.
While CEO Shin is to focus on management, Vice Chairman Park will keep serving as chairman of the board of directors until 2021, LG Chem said.
LG Chem’s decision to recruit CEO from outside is apparently to expand business scopes into non-petrochemical sectors including life science.
Boryung Pharm will name CEO Lee Sam-soo, who replaced Choi Tae-hong’s post, as a new internal director on March 22.
Lee joined Boryung in 2013, after serving as head of the plant of LG Life Science, executive director at Hanmi Pharmaceutical, and vice president at Celltrion Pharm. Lee is to lead Boryung jointly with Ahn Jae-hyun, who was appointed as CEO in September last year.
Dongwha Pharm plans to appoint Park Ki-hwan, former CEO of Boehringer Ingelheim Korea, as CEO to replace Lee Seol who abruptly left in just one month after being named as CEO.
Park is known to be a global market expert, accumulating experiences at Eli Lilly and AstraZeneca Korea.
Most pharmaceuticals to enhance ownership
Many local pharmaceutical companies are expected to enhance ownership of young generations.
Kwangdong Pharm is proposing to reappoint CEO and Vice Chairman Choi Sung-won. As the only child of the founder Choi Soo-boo, Sung-won has been leading Kwangdong since 2013.
Optimists expect that Choi will achieve stable sales growth as he has led the company to post annual sales of 1 trillion won ($885 million) since 2016. However, pessimists worry that he will not make much investment in pharmaceutical product development.
As Yuyu Pharm’s third-generation owner and Vice President, Yu Won-sang will reinforce his management grip as a new board director this year. He is the eldest grandchild of the late Chairman Yu Teuk-han and the eldest son of Chairman Yu Seung-pil. Won-sang entered Yuyu as an executive director in 2008 and became vice president in six years.
Yu made headlines as an entrepreneur with youthful ideas. He acted in a radio advertisement and participated in an ice bucket challenge to help patients with Lou Gehrig’s disease. If shareholders approve, Yu will serve a two-year term as an internal director.
Sam-A Pharm is also to maintain its ownership. CEO Huh Mi-ae, the daughter of founder Huh Eok, is expected to be renamed as an internal director at the upcoming general shareholders’ meeting.
Ildong Pharmaceutical CEO Yoon Woong-sub, a third-generation executive, will be appointed as a new internal director of Ildong Holdings to tighten his management control. Yoon is the grandchild of founder Yoon Yong-ku and the eldest son of Chairman Yoon Won-young. Woong-sub entered Ildong in 2005 as an executive director and became CEO in 2016 to lead the company solely.
Huons Vice Chairman Yoon Sung-tae, the only son of Huons Group Founder Yoon Myung-yong, is to change his position as an unregistered director from an internal director, apparently to strengthen Huons’ managerial discretion.
Celltrion Pharm CEO Seo Jung-soo, brother of Celltrion Chairman Seo Jung-jin, is expected to renew his term.
Uh June-sun, founder of Ahngook Pharmaceutical, is also scheduled to renew his term as CEO, although he has been avoiding to be directly involved in management.
Enhancing ownership raises not only anticipation for stable management but risks derived from owners’ wrongdoings. Some of the owners of the drugmakers who are to maintain their executive positions were mired in a “gapjil” controversy where they abused their power against employees.
“Such risks significantly affect the business of a pharmaceutical company. So, CEOs are required to do responsible and ethical management,” an official at a pharmaceutical firm said.