The CEO of Korean Air Lines Co Ltd, Cho Yang-ho, has now been forced out of his position by shareholders in a landmark vote this week. Cho had held the position at South Korean's largest carrier for over 27-years. The vote to reject Cho's extension for the CEO position came after a slew of new activist sentiments against corporate monopolies of founding family members. Following the news of Cho's removal as CEO, share prices for the airline rose sharply by as much as 5.6 percent. Share prices for the airline's parent company Hanjin Kal also increased by as much as 9.4 percent.
The vote is a particularly big deal in the country given that Cho will be the first founding family member of a large corporate entity that has been forced out of a board position by shareholders. South Korean corporations have long been dominated by its founding family members, which have mostly not been held accountable for their management and behaviors. This has led to a number of bribery and embezzlement scandals perpetrated by the owners of the company or by one of their family members.
The company's recently held annual shareholders' meeting was attended by a good number of shareholders accounting for 64.1 percent of the company's shares. All of them voted for the airline's proposal to reject Cho's three-year extension for his current position in the company.
According to North Korean corporate analysts, the recent vote will serve as a wakeup call to Korean family corporations and as a warning for them not to abuse their positions. Cho's family, in particular, has been in the middle of a number of scandals, which started with Cho's eldest daughter, Heather Cho.
In 2014, Cho's daughter made headlines when she threw a temper tantrum on board a Korean Air flight over how the attendants had served her nuts in first class. She reportedly ordered the airplane to immediately return to its gate in New York. In 2018, Cho's youngest daughter, Emily Cho, also made headlines after she threw a drink at someone during a business meeting. Cho himself had also been caught in his own scandal, which he is now facing in court. The scandal involves allegations of breach of trust and embezzlement.
Both daughters were eventually stripped of their positions within Korean Air due to an onslaught of public criticism. Shareholders were apparently not happy with Cho's family and their management style as it had negatively impacted the company's reputation and bottom line. In the wake of the scandals, the company experienced a number of financial difficulties and overall business performance had suffered.
