Samsung Electronics completes personnel reshuffle

Posted on : 2017-11-17 17:02 KST Modified on : 2017-11-17 17:02 KST
Primary goal is to consolidate power with imprisoned Vice Chairman Lee Jae-yong
Lee Jae-yong’s Control of Samsung from Behind Bars
Lee Jae-yong’s Control of Samsung from Behind Bars

Samsung Electronics wrapped up its reshuffle of executives as it announced promotions for executives to the rank of executive vice president and below on Nov. 16. This was the largest personnel shake-up since Lee Jae-yong took control of the company, and the second largest in the company’s history.

It is possible to identify two key aspects of this reshuffle – which reportedly carried out the wishes of Samsung Vice Chairman Lee Jae-yong, who is currently in jail – as a generational switch and the reappearance of executives from the old Future Strategy Office (FSO). On the same day that eight executives from the FSO were promoted, Lee attended a hearing in a trial appealing his conviction on charges of giving bribes.

Samsung Electronics announced on Nov. 16 that it had promoted 221 executives to the rank of executive vice president and below in its regular executive reshuffle for 2018, including 27 executive vice presidents, 60 senior vice presidents and 118 vice presidents. This represents more than one-fifth of the total number of executives (1,049) at the company. The promotions bring to a close the reshuffle of executives at Samsung Electronics, which began on Oct. 31 with the replacement of the heads of Samsung’s three core divisions, namely semiconductors (Device Solutions), consumer electronics (CE) and mobile devices (IM). That round of appointments considerably lowered the age of the division heads and company presidents, and the latest round makes the company’s executives even younger. The average age of the 27 newly appointed executive vice presidents is 54.1 years.

A major goal of the reshuffle is ushering in the next generation to help consolidate Lee Jae-yong’s control of the company. Samsung Electronics carried out a large-scale promotion of 227 people in 2013, but after company chairman Lee Kun-hee collapsed after a heart attack in May 2014, the scale of the promotions was reduced to just over 100. The executive promotions at the end of last year were delayed until this past May, and even then just over 80 people were promoted. The fact that such a large number of executives were promoted now appears to suggest that transferring control to Lee Jae-yong cannot be delayed any longer, even in Chairman Lee’s absence.

Another noteworthy development is the reinstatement or promotion of executives who had been with the FSO. As part of the promotion of seven presidents on Nov. 2, Chung Hyun-ho – the former head of human resources at the FSO and a person regarded as one of Lee Jae-yong’s closest associates – was brought back into the company as the president in charge of the business support task force. Chung was one of nine team leaders who resigned from the company during the dissolution of the FSO to demonstrate that the Samsung Group was taking social responsibility for its close involvement in the Choi Soon-sil influence-peddling scandal, but he is the only one who has been reinstated at the company.

The return of former FSO executives was also noticeable in the promotions of executive vice presidents and lower-ranking executives on Nov. 16. Lee Wan-ik and Kang Chang-jin, who worked at the FSO until the beginning of this year, were promoted from senior vice president to executive vice president, while six vice presidents were elevated to senior vice president. Choi Jin-won, a senior vice president who was promoted to executive vice president, had also been a part of the FSO at one point, where he was reportedly in charge of managing the Lee family’s finances. Lee In-yong, head of the communication team, resigned recently, and his position will reportedly be filled by Baek So-hyeon, who was promoted from senior vice president to executive vice president.

The guiding principle of the reshuffle, according to Samsung Electronics, is employee performance. And in fact, 99 of the 221 executives who were promoted, or close to half (44.8%), came from the semiconductor division (officially called Device Solutions). This was twice the number promoted in 2016 (57) and 2017 (41).

Of the 14.5 trillion won (US$13.23 billion) in operating profits that Samsung Electronics earned in the third quarter, the semiconductor division accounted for 9.9 trillion won (US$9.03 billion) or much more than half. In contrast, the mobile devices and consumer electronic divisions saw 39 and 36 people promoted, respectively. “The semiconductor division posted its highest profits ever, and 99 people were promoted there, which is the largest number ever, reaffirming the principle that promotions are strictly driven by performance,” said a spokesperson for Samsung Electronics. The company will soon be announcing an expanded plan for reassignments and reorganization.

Other group affiliates in the area of electronics – including Samsung SDS, Samsung SDI, Samsung Display, Samsung Electro-Mechanics and Samsung Venture Investment – pushed through an executive reshuffle on the same day.

By Choi Hyun-joon, staff reporter

Please direct questions or comments to [english@hani.co.kr]

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