LG chairman reviews affiliates’ performances amid looming exec reshuffle

LG Group Chairman Koo Kwang-mo, center, presides over a workshop with CEOs of the group's affiliates at its learning center in Icheon, Gyeonggi Province, Sept. 26. Courtesy of LG Corp.

LG Group Chairman Koo Kwang-mo is holding a series of debrief meetings with CEOs of the conglomerate’s affiliates to assess their annual performance and explore strategies for next year.

The debrief meetings are gaining attention as the group is set to launch a personnel shakeup in its top brass soon, and it may involve promotions for some CEOs, including LG Electronics CEO and President Cho Joo-wan.

According to industry officials, Friday, Koo has been holding debrief meetings with top executives of electronics-related subsidiaries since Oct. 21, and is set to preside over similar meetings with CEOs of listed LG companies in other industries.

LG Group has been holding such meetings twice a year to outline key directions for its primary business areas. In the first half, the group holds medium- to long-term strategy briefings involving around five units, while the second half debrief meetings are more focused on reviewing a year’s performance and how companies will conduct their business activities next year.

The meetings do not have a certain theme that covers all participating affiliates because each unit operates under different circumstances. However, it is understood that affiliates review their supply chain management practices from a broad perspective and assess their competitive positioning relative to rivals.

Since the debriefing meetings focus primarily on performance reviews of the current year and short-term action plans for next year, sources familiar with the group said the review will affect its regular personnel reshuffle scheduled for late November.

LG Electronics CEO and President Cho Joo-wan, right, visits the company's booth at the IFA 2024 exhibition in Berlin, Sept. 9. Courtesy of LG Electronics

Gaining attention in this year’s reshuffle is whether the group will promote its third vice chairman.

For years, LG Group was structured with three vice chairmen, but currently, it only has two: LG Chem CEO and Vice Chairman Shin Hak-cheol and LG Corp. Vice Chairman Kwon Bong-seok. This change follows the retirement of former LG Energy Solution CEO and Vice Chairman Kwon Young-soo last year.

Industry officials expect that Cho or LG Display CEO and President Jeong Chul-dong may be promoted during the upcoming reshuffle.

Cho started his career with the company in 1987 and became CEO in November 2021. His appointment came at a critical time, just months after the company's withdrawal from the smartphone business. Since taking office, he has been striving to transform the company’s portfolio from a conventional consumer appliance maker to a smart solutions provider, particularly in the growing business-to-business sector.

In 2022, the company posted 83.4 trillion won in sales, up 12.93 percent from a year earlier, and achieved over 80 trillion won in sales again in 2023.

LG Display CEO and President Jung Dong-chul / Courtesy of LG Display

Jung started his career at the now-defunct LG Semicon in 1984 and has dedicated over 40 years to LG's components and materials units, including LG Display and LG Innotek. He served as CEO of LG Innotek starting in 2019 before transitioning to LG Display, where his focus is to steer the panel maker toward recovering from its accumulated losses.

The two companies’ earnings in the third quarter, however, are somewhat disappointing.

LG Electronics announced on Thursday that it posted 22.18 trillion won in sales for the third quarter, which was the company’s highest third-quarter revenue, but said the operating profit during the July-to-September period declined year-on-year by 20.9 percent to 751.9 billion won.

LG Display managed to narrow its operating loss to 80.6 billion won in the third quarter, improving from a 662.1 billion won loss a year earlier. However, the timeline for profit is being delayed due to a slowdown in demand for OLEDs used in tablet devices.

“Unless there is a major misstep or a structural flaw, I do not think the third-quarter earnings will pose a significant impact on personnel decisions,” a conglomerate official said.

“The market reacts by comparing actual earnings with forecasts by securities firms, and making personnel decisions based on such reactions or short-term financial results could be hasty. Rather, evaluations will likely focus on whether the figures have the ability to navigate companies in a long-term perspective.”