Children of CEOs Hold More Than 50% Shares of 22 Companies

It has been disclosed that among the stock assets held by conglomerate leaders and their families, there are 22 instances where the stock assets of the next generation surpass 50 percent. This increase in the inheritance and gifting of stocks as part of the generational transition within these conglomerate families is believed to be the driving force behind this trend.

According to a recent survey conducted by corporate data research institute CEO Score on Aug. 30, which examined the status of stock asset inheritance within 56 out of 81 major conglomerate groups this year, it was found that there are a total of 22 conglomerates where the stock assets of the children’s generation account for more than 50 percent of the total stock assets held by the conglomerate heads and their families as of the end of July.

Among these, four groups, including Lotte, Hansol, DL, and Hankook Tire, showed that the stock assets of the children’s generation accounted for 100 percent of the total stock assets.

Compared to ten years ago, eleven companies – DL, DN, LG, Hanjin, Samsung, Hanwha, Shinsegae, Sinokor Merchant Marine, MDM, LX, and Hyundai Motor – have newly exceeded the 50 percent threshold. Meanwhile, Youngpoong saw a decrease from 50.7 percent to 48.0 percent over the past decade.

The transfer of stock assets to the next generation in large conglomerate families was achieved through methods such as inheritance, gifting, establishment of public foundations, and the rise in the corporate value of the children’s generation.

Prominent examples of asset transfer through inheritance include LG, Samsung and Hanjin, which rank 3rd to 5th in terms of the increase in the proportion of stock assets held by the next generation. As of the end of July, these companies have seen the stock assets of the children’s generation reach 82.4 percent for LG, 74.4 percent for Samsung, and 77.8 percent for Hanjin.

An example of asset transfer through a public interest foundation is DL. In 2015 and 2016, Lee Joon-yong, the honorary chairman, donated 42.65 percent of stocks of Daelim, formerly Daelim Corporation, in 2015 and 2016, and 2.31 percent of Daelim C&S stock to the foundation in 2018. This resulted in an increase of 58.1 percentage points in the proportion of stock assets held by the next generation.

There are six groups where the stock assets of the parent generation make up 100 percent of the total. These groups include Hyundai Department Store, Naver, Celltrion, Kolon, E-Land, and Kyobo Life.