The former chief technology officer (CTO) of Kakao Bank, who sparked controversy by exercising stock options worth some 7 billion won (US$5.25 million) immediately after Kakao Bank’s listing, has been nominated as the new CTO of Kakao.
According to the IT industry on March 4, it has been reported that Jung Sin-ah, the nominee for the CEO position at Kakao, introduced Jeong Kyu-don, the former CTO of Kakao Bank, as the next CTO of Kakao during recent on and offline meetings with employees to exchange opinions.
Jeong Kyu-don, the former CTO, sold 106,000 out of the 117,234 shares he owned on Aug. 10, 2021, just three trading days after Kakao Bank went public, earning approximately 6.6 billion won in profit. Two weeks later, he sold the remaining 11,234 shares, earning an additional profit of over 10 billion won.
The act of executives selling their company’s shares immediately after listing is criticized as a moral hazard, with some referring to it as a “stock dumping scandal.” The mass selling of shares by executives caused the stock price to decline, resulting in losses for ordinary shareholders.
The news of former CTO Jeong’s return to Kakao after resigning from Kakao Bank due to personal reasons in February last year has raised concerns about Kakao’s organizational and management style. Despite Kakao’s earlier pledge to change its organization and management practices, the company’s decision to engage in a “revolving door” personnel policy is now being viewed with apprehension.
Furthermore, criticism has been raised regarding the timing of the announcement of Jeong’s nomination as the next representative and the direction of future personnel appointments and organizational restructuring, given that Kakao’s current CEO, Hong Eun-taek, still has tenure remaining. Critics argue that such announcements were inappropriate at this juncture.
During the meeting, the nominated representative, Jeong, revealed plans to integrate the “Commerce Company In Company (CIC),” which includes KakaoTalk Gift & Shop and Kakao Shopping Live, into Kakao’s internal division. Additionally, it was reported that she mentioned transitioning from a department-based autonomous operation to a uniform attendance system without prior discussion with the labor union.