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Seoul — South Korea’s SM Entertainment was appointed Zhang Zhehe As the company’s new chief executive on Friday (March 31), the K-pop giant vowed to turn a new leaf by bringing in a new leader and board.Zhang succeeds outgoing CEO Lee Sung Soo.
“At a time when SM is about to take a big step forward, I feel that taking on the role of CEO is a great responsibility,” Chang said in a statement. “We will establish a sound [and] A transparent governance structure and faithful execution of SM 3.0 strategy make SM a fan- and shareholder-centric global entertainment leader. ”
The landmark corporate restructuring is part of SM’s efforts to improve corporate governance and its production systems, which have lagged rivals and come under investor scrutiny in recent years.Friday’s date also ends a weeks-long gripping drama The world of K-pop, industry giant HYBE, home of boy bands BTSTake on South Korean tech giant Kakao.
A certified public accountant and professional manager, Jang joined SM in early 2022 as CFO and participated in the formulation of SM’s future blueprint.Dubbed SM 3.0, the plan aims to diversify the company’s talent portfolio and decentralize more creative control away from the single-pipeline structure led by SM’s founders Li Xiuman.
For years, Lee has not held a formal position with SM, which has grown the K-pop group EXO, NCT and Girls’ Generation — but as its largest shareholder, he wields virtually unfettered power. He was paid millions of dollars a year to produce, an arrangement that ended late last year after a shareholder revolt.
At the meeting on Friday, Kim Kyung WookFormer SM CEO Lee Soo-man, now a shareholder, pressured the agency to recoup the production fee, but outgoing CEO Lee Sung-soo (Lee Soo-man’s nephew) said the company wasn’t ready to consider such a step.
Cracks began to appear at SM in February after management signed a partnership agreement with Kakao without Lee Soo Man’s approval.Founder’s Revenge Sell most of the shares to HYBE And set the stage for a possible merger between the two biggest K-pop agencies.
Friday’s shareholder meeting was hyped for a fierce battle between HYBE and Kakao, and then HYBE suddenly throw in the towel last week, and transferred some of its SM stake to its rival.
Kakao, together with its subsidiary Kakao Entertainment, has now acquired nearly 40% of SM’s shares, making it the company’s largest shareholder. Zhang RunzhongExecutive Vice President/Global Strategy Officer, Kakao Entertainment, and CEO, Align Partners Lee Chang Hwan – Leading the shareholder revolt – now on the board as a non-executive director.
Three SM executives, including incoming CEO Zhang, were also appointed to the board, while five outside directors were also approved: Kim Kyu SikChairman of Korea Corporate Governance Forum; Kim Tae KyumLawyer at Pingshan Law Firm; Wen ZhongbianProfessor of Business School, Korea University; Lee Seung MinPeter & Kim Partners; and Song M. ZhaoCEO of music analytics company Chartmetric.
Before BTS conquered the world, Lee Soo Man was the most famous face of K-pop in South Korea, for good and bad reasons. He was praised as a visionary but also criticized for his harsh treatment of interns and artists. While he treats committed artists like family, keeping them on the roster even after their careers have peaked, he’s also been accused of overly controlling the act’s professional and personal lives. He was also convicted of embezzlement, though he was later pardoned by the president for his contributions to K-pop.
Lee Soo Man still owns more than 3% of SM, but has not disclosed his future plans for the company. A delegate representing him at Friday’s meeting was silent at the meeting.
“Today marks the end of an era for SM, a company I founded in my name,” Lee said in a statement emailed to reporters shortly before the shareholder meeting. While he did not comment directly on the proceedings, he said he stayed abroad and was “deeply immersed in the world of global music”.
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