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K-pop label SM Entertainment said on Wednesday it will return more than 20 percent of its net profits to shareholders over the next three years.
At a board meeting on Sunday, the company agreed to spend 20 percent or more of its net profit as a year-end dividend to shareholders or buy back its own shares to boost shareholder value, starting at a shareholder meeting in March.
The board also approved the formation of an interim committee to recommend three additional outside directors to the board.
Three members were appointed to the committee: Lee Sung-soo, CEO of SM Entertainment; Cho Myung-hyun, professor at Korea University’s School of Business; Lee Nam-woo, visiting professor at Yonsei University’s Graduate School of International Studies.
“We look forward to accelerating board-centered management by recommending independent and reasonable outside director candidates as well as interim committee members,” the company said.
The announcement is part of the agency’s efforts to comply with a December letter sent by Align Partners Capital Management, which owns 1.1 percent of SM Entertainment. SM Entertainment promised earlier this month that it would increase the number of outside directors from one to four and make its dealings with subsidiaries more transparent.
The company will also introduce a multi-production system, not relying solely on the musical prowess of its founder Lee Soo-man, but building multiple production lines to maximize sustainability.
Details will be announced on the SMTOWN YouTube channel and company website at noon on February 3.
BY YOON SO-YEON, SEO JI-EUN [seo.jieun1@joongang.co.kr]
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