For Seeking New Growth Engine: What Makes Samsung Electronics Vice Chairman Kwon Step Down? | BusinessKorea

Wednesday, October 18, 2017

Samsung Electronics vice chairman Kwon Oh-hyun will announced his stepping down from the management.
Samsung Electronics vice chairman Kwon Oh-hyun will announced his stepping down from the management.
SEOUL,KOREA
13 October 2017 - 7:00pm
Michael Herh

Samsung Electronics vice chairman Kwon Oh-hyun announced on October 13 that he will step down from the management for good, leading people to pay much attention to what made Kwon to make the decision. The top management of Samsung Electronics understood that vice chairman Kwon made this decision without telling vice chairman Lee Jae-yong, considering the decision somewhat shocking.

In particular, as Samsung Electronics announced its record-high earnings, those inside and outside the Korean business world are becoming more curious about what led vice chairman Kwon to make the decision to quit Samsung.

Samsung Electronics said in a press release at 10:14 am on the day that vice chairman Kwon will step down from the Samsung Group leadership. Many Samsung Electronics employees seemed so shocked because Kwon’s retirement announcement came less than two hours after the release of the news that Samsung Electronics posted record highs of 62 trillion won (US$55 billin) in sales and 14.5 trillion won (US$13 billion) in operating profit in the third quarter.

Kwon stated that he will serve as chairman of Samsung Electronics' board of directors until March of next year. Kwon added that he will resign as CEO of Samsung Display before long. Kwon said that he will deliver his will to step down to vice chairman Lee Jae-yong (the de-facto leader of the Samsung Group) and disclosed his plan to recommend his successor.

"The current record-high performances of Samsung Electronics are just the result of investment in the past," Kwon said. “Samsung is faced with a serious situation where the company is unable to find a new growth engine."

It was known that vice chairman Kwon made a personal decision because he judged that as a Samsung man who worked at Samsung for 32 years, it does not do the company and employees any good for him to see the serious situation at Samsung until March 2018 when his term will expire.

Some say that it is irresponsible for him to resign in such a serious situation but he was convinced that such actions would only slow down Samsung Electronics' change. For this reason, it seems that he referred to a successor recommendation through the official press release.

"Kwon became vice chairman in June 2012 and will finish his two consecutive terms as vice chairman next year," said an official familiar with news about the Samsung Group “I know that Kwon has chewed resignation for a long time.” Taking this into account, it is presumed that Kwon set the day to announce the company’s preliminary third-quarter earnings as the right time to lay out his resignation plan. This means that Kwon wanted to give Samsung Electronics some time to think about the uncertain future of the company and the appointment of his successor prior to the announcement of the finalized results.

 

 

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