People

The People

Governance grade: C+. SKC checks every formal box that Korean and global ESG raters reward — majority-independent board, female chair, AA from MSCI — but the structural reality is an SK Group–controlled subsidiary that just installed a brand-new CEO, asked minorities to fund a ₩1 trillion rights issue alongside two consecutive years of nine-figure losses, and discloses zero per-officer compensation in English. Trust the institutions; verify the alignment.

1. The People Running This Company

The CEO chair turned over six weeks ago. On 26 March 2026 the 53rd AGM appointed Kim Jong-woo as President & CEO of SKC, replacing Park Won-cheol who had run the company since 2022. Kim was named concurrent CEO of SK Nexilis (the copper-foil subsidiary) at the same restructuring. CFO Park Dong-ju was hired from SK Inc. in late 2025 and was elevated to inside director at the same AGM. The independent chair is Chae Eun-mi, ex-CEO of FedEx Korea, reappointed in March 2026 — the first woman to lead the SKC board.

The bench is credible on paper — McKinsey, Affinity Equity, Kim & Chang, Intel, SK Hynix, Lam Research — but it is overwhelmingly an SK Group bench. Kim Jong-woo, Park Dong-ju, Yoo Ji-han, and Kim Kee-dong are all SK Group lifers. The non-SK voices on the board are the four independents, and they were brought in to validate, not to challenge. The single most consequential outside hire is Kang Ji-ho at Absolics: ₩590 bn of the rights-issue proceeds are being routed to his unit, so his execution dictates whether the dilution pays.

2. What They Get Paid

SKC discloses board structure, but per-officer compensation tables sit in the Korean DART business report — not in the English Sustainability Report. What is visible is the machinery: a 75%-independent HR Evaluation & Remuneration Committee that met 10 times in 2024 (up from 5 in 2023) and a short-term incentive scheme tied to financial KPIs that MSCI specifically credited when upgrading SKC to AA.

MSCI ESG Rating: AA

In short: the system (committee independence, frequency, KPI linkage) reads well. The receipts are not in English.

3. Are They Aligned?

This is the section that decides the case. SKC has one parent (SK Inc., 40.64%) underwriting one rights issue (₩1 trillion) to fund one bet (Absolics) while two years of losses have already required ₩893 bn of asset disposals. Skin-in-the-game lives at the parent level, not the management level.

Ownership and control

The rights issue dominates the alignment story

The rights-issue mechanics are alignment-positive in two specific ways: SK Inc. is paying for ~120% of its pro-rata, which is more than passive support. And the ESOP was 132% oversubscribed — employees voting with their own won. They are also alignment-negative because the equity raise is happening after two years of losses, because the company can no longer borrow more (interest coverage is −4.6×), and minorities who don't subscribe will dilute substantially.

Capital allocation — the dilution & disposal pattern

The shareholder-friendly read: management is actively monetizing non-core assets to fund the strategic pivot, rather than letting cash burn through the income statement. The shareholder-unfriendly read: every cash-raising mechanism in the past 18 months has been dilutive or one-time. There is no buyback. The dividend was zero in FY24/FY25 (capital surplus + retained earnings collapsed from ₩1.14 trillion to ₩−51 bn).

Insider activity & related parties

Detailed insider trading (Korean Form 4–equivalent) is filed only on DART in Korean. The English-language record is silent on individual director/officer transactions. What is visible:

• The Internal Trade Committee is 100% independent, met 12 times in 2024, attendance 97.3%, with 17 reported and 0 resolved-with-objection items. SKC sits inside the SK Group ecosystem (SK Inc. parent, SK Hynix sister, SK Materials cousins) — related-party flow is structural and constant, not occasional.
• The 2019 acquisition of KCFT (now SK nexilis) from KKR for ~$1 billion was the defining capital-allocation decision of the past decade. It was an arm's-length deal at its time, but SK nexilis is the largest source of impairment exposure in 2024–25.
• Park Won-cheol simultaneously served as SKC parent CEO and CEO of Absolics during 2022–March 2026 — material related-party self-dealing risk inside one person, now resolved by the CEO change.

Skin-in-the-game scorecard

Score: 6/10. SK Inc. is putting real money behind its conviction and so are rank-and-file employees through the ESOP. But there is no English-language evidence that SKC's named executive officers personally own a meaningful slug of the float, and the parent's interests dominate every alignment vector — including how the rights-issue economics get split. A clean 6 — not the 4 a less-engaged controlling shareholder would warrant, not the 8 a founder-CEO with personal ownership would.

4. Board Quality

The SKC board is what the SK Group calls a "model" inside its portfolio. It is genuinely better-than-average for Korea: 57% independence, two female directors (29%), the first female chair in the company's 53-year history, four monthly committees that pre-deliberate everything, and 80% compliance against the Korean Corporate Governance Code (industry average 63.5%). The audit committee is 100% independent, meets 13 times a year, and posts 100% attendance.

The expertise gap that matters: nobody on the board has direct lithium-ion battery materials or semiconductor advanced-packaging operating background. The technical knowledge to challenge management on Absolics or Malaysia copper-foil ramp lives outside this room. Park Si-won (ex-McKinsey/Affinity) and Jung Hyun-wook (CPA, ex-Seoul Semiconductor CFO) are the strongest commercial pushers; the rest are governance/legal/global generalists.

5. The Verdict

Governance Grade: C+ — Good Korean SK-affiliate governance, weak on alignment + pay transparency.

Strongest positives:

• 57% board independence, 100%-independent Audit and Internal Trade Committees, first-female chair, KCGS Excellent Governance award, MSCI ESG AA — the formal architecture is genuinely above-Korea-average.
• SK Inc. is paying its way (120% rights-issue allocation) and employees are oversubscribing the ESOP at 132% — both are real conviction signals.
• The new CEO transition (Kim Jong-woo) cleanly resolved the Park Won-cheol concurrent SKC/Absolics dual role that was a structural conflict.

Real concerns:

• ISS Compensation decile 8 + zero English per-officer pay disclosure means pay-for-performance during ₩1.17 trillion of cumulative losses cannot be verified.
• 28-of-28 board resolutions approved in 2024 (and a similar pattern in prior years) reads as a board that endorses, not a board that pressures.
• Capital allocation has been one-way dilution: ~22% rights issue in 2026 + EB issuance + asset disposals, with no buyback or dividend.
• Parent SK Group sits behind every decision and faces its own governance overhang (Chairman Chey Tae-won's ₩1.38 trillion divorce settlement remains under Supreme Court review and could force SK Group asset monetization).

The one thing that would change the grade: