April 20, 2024

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Hyundai Motor Group won support from the National Pension Service for its key proposals ahead of its shareholders meeting on March 22, in a blow to Elliott Management. 

Elliott Corp. founder Paul Singer

NPS is the second-largest shareholder of Hyundai Motor. On March 14, it decided to back proposals by the Korean carmaker and its car parts affiliate Hyundai Mobis for their appointment of outside directors and dividends plans to give out 3,000 won ($2.65) per share for Hyundai Motor and 4,000 won for Hyundai Mobis.

At the same time, NPS shunned US-based activist fund Elliott’s earlier dividend proposals as “excessive.” Elliott had asked dividends of 21,976 won per share for Hyundai Motor and 26,399 won for Hyundai Mobis.

The pension fund also said that the outside directors proposed by Elliott could pose a conflict of interest. As the most controversial figures among them, the NPS cited Randall MacEwen, CEO of Ballard Power System, for Hyundai Motor and Robert Kruse Jr., who serves as Chief Technology Officer at Karma Automotive, for Hyundai Mobis.

Industry watchers raised concerns that MacEwen, who’s leading a fuel-cell company considered as a rival to the South Korean firm, could gain access to critical information including Hyundai’s hydrogen technologies and plans. They also pointed out that Karma is a Chinese electric car maker with which Mobis plans to expand its partnership.

Two other nominees John Liu, and Margaret Billson, CAE board of director, have no experience in the automobile business, industry sources said. “It’s an important time to overcome weak performance and appointing unsuitable directors could be critical,” a Hyundai Motor official said.

Hyundai Motor Group has so far secured full or partial backing from NPS, Korea Corporate Governance Service and proxy advisory firms Daishin Economic Research Institute and Glass Lewis & Co.

Shareholder advisory firm Institutional Shareholder Services, meanwhile, supported two of Elliott’s board of directors recommendations -- Liu and MacEwen -- while opposing Elliot’s call for Hyundai Motor Group to return almost 7 trillion won to shareholders in dividends.

By Park Ga-young (gypark@heraldcorp.com)