ENTERTAINMENT
Hive launches shareholder proposal campaign ‘SM with HYBE’
Hive opened the shareholder proposal campaign page ‘SM with HYBE’ on the 2nd. Through this, Hive earnestly recommends delegation of voting rights at the regular shareholders' meeting to be held on March 31, while also publishing a video explaining shareholder proposals by Hive CLO (Chief Legal Officer) Jin-soo Jeong and Jae-sang Lee, CEO of Hive America, who are candidates for internal directors, to ensure shareholder rights and interests. Specific measures for protection were revealed.
Hive's shareholder proposal campaign is based on the judgment that SM's current management is seriously violating shareholder value. SM's current management has approved △an 'unfair' business cooperation agreement with Kakao △unrealistic 'SM 3.0' financial goals that can only be achieved through rapid growth in a short period of time △emotional messaging strategies that mislead public opinion, etc., etc., △cutting off, and maintaining professionalism and transparency in management. The goal is to add .
Hive established an electronic delegation page on the campaign website and made it easy for individual shareholders to delegate their voting rights. The intention is to ensure that everyone can smoothly exercise their shareholder rights, regardless of the number of shares held.
◆ Hive Board of Directors proposal, ‘maximizing shareholder value’ through expertise and transparency
Through shareholder proposals, Hive selected board of directors candidates with extensive experience and business operation expertise in the essential entertainment business and secondary IP business.
As internal director candidates, we proposed Jae-sang Lee, CEO of Hive America, Jin-soo Jeong, Chief Legal Officer of Hive, and Jin-hwa Lee, Head of Management Planning at Hive. These candidates have accumulated a wide range of experience in the strategy, operations, law, and finance fields of global entertainment, IT, and content companies.
As outside director candidates, Kang Nam-gyu, representative attorney at Gaon Law Firm, Hong Soon-man, professor of public administration at Yonsei University, and Dae-woong Lim, Korea representative of the United Nations Environment Program (UNEF) Financial Initiative, were recommended. Representative attorney Kang Nam-gyu is a legal expert, Professor Hong Soon-man is a certified public accountant and authority in the field of social science, and CEO Im Da-woong is an expert in the ESG and environmental fields.
As a non-executive director candidate, Park Byeong-moo, a former lawyer and CEO of VIG Partners who served as CEO of Locus Holdings and Plenus Entertainment, was recommended. As a non-executive auditor candidate, Choi Gyu-dam, former managing director of NCSoft, was recommended as a certified public accountant with experience working at Anjin Accounting Corporation and Kim & Chang Law Firm.
If Hive's shareholder proposal is accepted, those who led and approved SM's management issues in the past and Align Partners officials who have applied inconsistent standards for enhancing shareholder value will lose their decision-making rights at SM.
In addition, Hive proposed changes to the Articles of Incorporation to strengthen the transparency of the Board of Directors. Hive plans to strive to strengthen SM's internal control and preemptively prevent legal risks by establishing measures such as introducing a compliance officer system, separating the CEO and the chairman of the board of directors, and establishing subordinate committees and ensuring independent operation.
Hive's internal director candidate Jae-sang Lee pointed out in detail the elements that could create synergy if Hive joins SM's 'SM 3.0' strategy through a video.
First, candidate Lee expressed sympathy with the strategic direction of 'SM 3.0' and explained that Hive has already successfully operated SM 3.0's major projects. △Experience in operating multi-labels through the success of acquired labels (Pledis Entertainment), new labels (Adore), and existing labels (Big Hit Music) △IP content diversification and commercialization capabilities that have increased the proportion of secondary IP business sales to 50% △Global business infrastructure, including the overwhelming network in the North American market, △Hive's new business history, which has already been proven in most of the new business investment areas planned by SM, were introduced. It was emphasized that Hive is the optimal partner that best understands the direction of 'SM 3.0' and can grow together.
Next, based on the Hive business model, the key elements for the implementation and success of the 'SM 3.0' strategy were shared, and the opinion was expressed that an overall reexamination of the factors is necessary as financial and business risks are expected from a realistic perspective.
In particular, candidate Lee spent a long time discussing strategies for SM and Hive to grow together through synergy.
Candidate Lee said that △the music business, which is the essence of SM, will be conducted in a direction that firmly maintains the philosophy of quality supremacy in original music content △using experience in operating the catalog business in the U.S. market to negotiate remixes, collaborations, and playlists, 2 We plan to promote catalog business efficiency and growth strategies, such as substituting secondary IPs. △ We plan to increase communication with artist fans and respond to needs. We will further solidify areas that are currently working well, and add 'keeping promises' and 'artist support'. They announced that they will systematically operate the process from a ‘protection’ perspective.
Regarding the global strategy, he said: △ Utilizing partnerships with mainstream operators rather than new partners without local music business experience and networks △ Promoting efficient global activities based on fan data even if not focusing on building a business base that requires all costs △ Strengthening They presented several growth plans to compete against global top-tier music companies, including integrated business expansion and profitability improvement based on negotiation power.
Lastly, Hive planned a shareholder return and compensation policy that aligns the interests of shareholders and management. Executive director candidate Lee Jae-sang said, “We plan to maintain SM’s net profit dividend payout ratio of 30% for the next three years while introducing a compensation system that improves growth and shareholder value in a balanced manner.”
Reporter Junho Yoon, Ten Asia delo410@tenasia.co.kr
