Samsung Electronics is undergoing leadership changes. Three top executives, who have been working with the company for more than two decades, will be replacing the current chief executives. These changes have occurred following the arrest of Samsung group’s scion Jay Y. Lee, who was convicted in August on charges of bribing South Korea’s former President and embezzlement. Lee was serving as the de facto head of the organization, and he is looking at a five-year prison sentence, fighting this conviction in appeals court.
Effectively immediately, the leadership changes are as follows:
- Kim Ki-nam, 59, will lead the Device Solutions division, which makes components like memory chips. Kim is one of the veterans within the company, serving since 1981. He led the development of various memory technologies, and is said to have been Kwon’s right-hand man in the organization.
- Koh Dong-Jin, 56 will be heading IT and Mobile Communications.
- Kim Hyun-Suk, 56, will be leading Consumer Electronics.
Sarah Lien, Client Portfolio Manager at Eastspring Investments, told CNBC’s Capital Connection that the move to separate the roles of the chairman and CEO were a step in the right direction for corporate governance reforms.
Samsung said this would be the first time it will split the Chairman of the Board and the CEO. The company will make these recommendations after the next shareholder meeting in March. Current Chief Financial Officer Lee Sang-Hoon will resign effective immediately. According to the company Lee has been “recommended by outside Board members to be Chairman of the Board and succeed Mr. Kwon next March.”
“Samsung has very many seasoned veterans who will get promoted as a result of the executive shuffling,” Patrick Moorhead, President and Principal Analyst at Moor Insights and Strategy, told CNBC. He added, “I do think Samsung needs to make sure that at least one of the replacements has a long-term vision for the company.”
On Tuesday, Samsung announced record profits for the third quarter, which was mainly due to the strong demand for memory chips used in mobile devices and servers.