Align Partners Seeks Injunction Against Gabia Over Executive Pay Disclosure Proposal

Activist fund manager Align Partners Asset Management has filed for a preliminary injunction against KOSDAQ-listed Gabia after the company rejected its shareholder proposal calling for greater transparency in executive compensation.

Align Partners announced Monday that it filed the injunction request with the Anyang branch of Suwon District Court on Feb. 27. The asset manager had submitted a shareholder proposal ahead of Gabia's annual general meeting recommending the company disclose compensation structures for directors and key executives, but the proposal was rejected.

The proposal aimed to enhance management transparency by requiring disclosure of the basis for calculating executive compensation through corporate governance reports or remuneration reports. However, Gabia reportedly rejected the proposal, arguing that advisory shareholder proposals have no basis in the company's articles of incorporation.

"We filed for the preliminary injunction seeking to have the agenda item placed on the meeting agenda after Gabia explicitly notified us that it would refuse to do so," Align Partners said.

Unlike binding shareholder proposals, advisory shareholder proposals are non-binding resolutions that carry no legal force even if approved by shareholders at general meetings. When such proposals pass, they serve as recommendations to the board and management regarding policies, disclosures, and planning.

Ahead of this year's annual general meetings, Align Partners has submitted similar proposals to five companies—Gabia, Coway, Dentium, Soluem, and A-Plus Asset Advisor—recommending disclosure of compensation structures for directors and key executives.

"Financial regulators have recently been pushing to strengthen executive compensation disclosure requirements, and institutional investors both domestically and internationally consider the linkage between pay and performance, as well as transparency, to be important factors in investment decisions," said Lee Chang-hwan, CEO of Align Partners. "Our shareholder proposal is intended to establish an institutional foundation for enhancing long-term corporate value and strengthening shareholder trust."

Lee added: "We hope this injunction will secure an opportunity for shareholders to freely discuss this matter at the general meeting."