April 25, 2024

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[THE INVESTOR] Samsung Electronics is expected to initiate another round of executive reshuffle this week, on the heels of the latest leadership shakeup at the group’s flagship electronics unit that market watchers consider “unprecedented,” according to sources on Nov. 1.

“The recent leadership change was something one has never seen before in terms of its scale,” said an industry source who wished to be unnamed. “By bumping up the No. 2 at each unit, the plans seem to be achieving stability.” 

The source anticipated that to fill the vacancies following the appointment of new CEOs, Samsung will pick up the pace in conducting more executive-level reshuffles and in general, restructure the organization.

The fact that the newly appointed CEOs, all under the age of 60, are relatively younger than their predecessors indicates that Samsung is trying to bring vigor to the top management and revitalize the entire organization.

“Getting rid of all three chiefs at once was baffling, mostly because it was so unexpected,” said a Samsung insider, adding that the move may apply pressure on other 60-something executives to step down.

Of the 32 CEOs at Samsung’s 17 key affiliates, 21 are aged 60 or older. The average age of the CEOs is 60.2, higher than 57.2 years in 2014.

On Oct. 31, Samsung Electronics named new three CEOs -- Kim Ki-nam, Koh Dong-jin, and Kim Hyun-suk -- who will lead the components, mobile and home appliances unit, respectively.

The move came after Kwon Oh-hyun, vice chairman of Samsung Electronics, who oversees the operations of all affiliates, announced earlier in October that he would step down to bring in new blood to get through the “unprecedented crisis” the group is facing. It had earlier postponed its annual reshuffling exercise amid a political scandal.

Samsung heir and Vice Chairman Lee Jae-yong, who serves as de facto leader of the firm following the hospitalization of his father Chairman Lee Kun-hee in 2014, is behind bars for his alleged involvement in a corruption scandal involving former President Park Geun-hye.

On Nov. 1, a day after it announced the new CEO lineup, and following its record-breaking quarterly profit, Samsung Electronics’ stock price closed at an all-time high of 2,861,000 won (US$2,554). The firm’s third-quarter operating profit stood at 14.53 trillion won with its revenue standing at 62.05 trillion won.

By Kim Young-won (wone0102@heradcorp.com)