Samsung announces new board chairman, three CEOs

After announcing record-breaking earnings in the third quarter, Samsung Electronics on Tuesday revealed its new leadership by promoting current heads of three business divisions to CEOs, and appointing jailed de-facto leader’s close associate as the new chairman for the board of directors, choosing stability over radical makeover.
 
Samsung announced that President Kim Ki-nam has been promoted to CEO of the Device Solutions Division, while Kim Hyun-suk will be CEO of the Consumer Electronics Division and Koh Dong-jin, CEO of IT & Mobile Communications Division. 

The new leadership is symbolic in a way that they will complete the replacements of long-time loyalists to bedridden Samsung Chairman Lee Kun-hee including Vice Chairman Kwon Oh-hyun, CE CEO Yoon Boo-keun and IM CEO Shin Jong-kyun. 

Lee Sang-hoon, known as a close aide to Samsung heir Vice Chairman Lee Jae-yong, stepped down from the current chief financial officer position, but was appointed as chairman of the board of directors as he has been recommended by outside directors.

After Kwon’s sudden announcement to resign on Oct. 13, it was widely expected that Samsung would experience a generational transition from the older executives, who had served for Chairman Lee Kun-hee, to younger executives that have been lately working for Vice Chairman and de facto leader Lee Jae-yong.

Some company watchers had speculated formation of the new leadership could be “unconventional” such as by promoting vice president-level figures to CEO positions. The latest shakeup, however, is considered moderate, for now.

“The core of the new appointments is Lee Sang-hoon’s change in his status,” said Park Ju-jun, CEO of corporate watcher CEOscore. “Follow-up reshuffles are likely to be influenced by Lee, who is the closest aide to Lee Jae-yong while he is in jail.”

Lee Sang-hoon is said to have supported the Samsung heir when he was studying at Harvard Business School as Lee was working for Samsung Electronics America from 1999 through 2001.

Lee had also served for the scrapped Corporate Strategy Office, a former control tower of all Samsung affiliates, and a special entity for managing issues regarding the owner family. 

“The absence of the Corporate Strategy Office is felt really big for Samsung now,” Park said. “Having Lee, the board may operate like the former control tower.” 

By announcing the three new leaders, Samsung said it will maintain the current three co-CEO management structure. And all new appointments will be effective immediately. 

“The next generation of leaders are well suited to accelerate the pace of innovation and address the demands of the connected world,” Vice Chairman Kwon said at a board meeting on Tuesday. “They have proven track records with extensive experience and outstanding expertise in their fields.”

Kim Ki-nam who joined Samsung in 1981 is a seasoned veteran on the company’s most lucrative semiconductor business. Kim has served as the head of Samsung Advanced Institute of Technology; CEO of Samsung Display; head of the Memory, System LSI Businesses and until now was responsible for the overall semiconductor business.

Kim Hyun-suk is an expert in display products, having played a major role in Samsung’s TV business.

Koh Dong-jin has been leading the development of Samsung’s flagship Galaxy smartphones, who overcame the recalls of Galaxy Note 7 phones last year by successfully launching the Galaxy S8 series and Note 8 this year. 

Outgoing Yoon and Shin said in a joint statement that they have made a decision to follow Vice Chairman Kwon’s earlier announcement to resign, making way for new leaders.

“It is an honor and a privilege to have been part of the historic rise of Samsung Electronics,” the statement said. “We are confident that our successors will keep the company on its growth path.”

The three CEOs and Lee will join Samsung’s board of directors in the coming March as the board will hold the annual general meeting.

Appointment of Lee as the board chairman marks the first time that Samsung separates the position from the CEO roles, the company said.

“In this time of transition, I look forward to Lee’s insight as CFO and overseer of global operations to help guide the board and its new executive members,” said Lee Byung-Ki Lee, an independent director and Chairman of the Governance Committee of the board.

By Song Su-hyun (song@heraldcorp.com)