Chung Yong-jin, chairman of Shinsegae Group, will become co-chief executive of Emart and Shinsegae Property, two of the group's core affiliates. The move means he will stand at the front line of responsible management as a registered director. "I take seriously the market's demand to bear clear responsibility for company management," Chung said, explaining the rationale behind the decision. "Going forward, as a chief executive, I will be subject to evaluation by the board and shareholders."
According to Shinsegae Group on Tuesday, Shinsegae Property will hold a board meeting as early as within this month to nominate Chung as a candidate for registered director. The company plans to appoint him as co-chief executive through successive shareholder meeting and board procedures. The group has also tapped Lee Hyung-chun, head of Shinsegae Property's development division, as another co-chief executive to lead key projects such as Starfield Cheongna alongside Chung.
Chung is expected to take the Emart CEO post early next year. The group will name Chung as Emart co-chief executive in the regular executive reshuffle between September and November this year, then complete the final appointment process at next year's shareholder meeting. Once the process is complete, Chung will form a co-CEO system with Han Chae-yang, Emart's chief executive.
With this, Chung will simultaneously oversee Emart, the group's current revenue source, and Shinsegae Property, its future growth axis. Shinsegae Property is the affiliate responsible for the group's core development business. In March this year, it signed a memorandum of understanding (MOU) with U.S.-based Reflection AI and is leading the practical work of building an AI data center. The data center will have a capacity of 250 megawatts, equivalent to the amount of electricity that about 250,000 households can use at once. The industry estimates that more than 10 trillion won will be needed to build the infrastructure.
Shinsegae Group said, "Chung directly signed the Reflection AI MOU and is now taking on the Shinsegae Property CEO role, taking responsibility for both the future and the present of the business portfolio." It added, "With the addition of the CEO post at Emart, the group's roots, he will be in a position to lead and be evaluated on both the present and the future at the same time."
The decision to hold concurrent posts also reflects his intention to take responsibility for the turmoil inside and outside the group sparked by the Starbucks Korea "Tank Tumbler" marketing campaign. Emart is the largest shareholder with a 67.5% stake in Starbucks Korea. In a public apology on the 26th of last month, Chung appealed for restraint in criticism directed at store employees and declared, "All responsibility lies with me."
Once Chung becomes chief executive of the two companies, the number of affiliates whose boards he sits on will increase to three in total, including AG Global Holdings, the largest shareholder of Gmarket. Shinsegae said, "An owner holding concurrent CEO posts is not a matter to be concluded in a short period, so we have been examining it for a long time." It added, "We made the final judgment that, prompted by the Starbucks incident, it is time to strengthen responsible management."
The business community describes the move as "unusual." It runs counter to the trend among the business community, where owner families shy away from registered director positions citing legal burdens such as the Commercial Act and the Serious Accidents Punishment Act. According to a survey by Leaders Index, the number of registered executive posts held by the heads of 49 domestic groups fell 14.5% from 117 in 2020 to 100 last year. This reflects a series of legislation strengthening the legal responsibility of registered directors in relation to accidents and shareholder protection.
Along with the decision on Chung's concurrent co-CEO posts at affiliates, Shinsegae Group tapped Shin Dong-woo, head of the finance division at Shinsegae Group's strategy office (executive director), as the new CEO of Starbucks Korea, a position currently vacant. Shin is regarded as a figure equipped with the sales capabilities needed for internal stabilization and responding to customer churn. He has closely experienced Chung's management philosophy at the group's strategy office and is well-versed in internal affairs, having served as head of Starbucks Korea's strategic planning division from November 2023 to February last year. He also has experience leading the sales organization during his time at SSG.com in 2022.
