FSC mulls to force companies to spread out shareholders’ meeting dates

[Photo provided by FSC]

The government will force companies to spread out annual shareholders’ meetings in Korea where nearly 60 percent of listed members ending their fiscal year in December hold meetings over the last two weeks of March.

In order to prevent the long-standing business practice where many firms hold annual shareholders’ meetings on one day called ‘Super Shareholders’ Day’, the nation’s Financial Services Commission (FSC) and the Ministry of Justice announced Wednesday that they will set a restriction on the number of stockholders’ meetings that can be held on one day and accept applications on a first-come basis.

Last month, 1,151 listed firms in the country held their shareholders’ meetings on March 22, 27 and 29, which represented about 58 percent of total 2,000 or more listed firms as of last December. On March 29 alone, 526 companies held the meeting. The practice deprives stakeholders owning shares in multiple companies of opportunities to attend the meeting and cast their vote.

For instance, maximum 100 companies can hold their shareholders meetings on the same day in Taiwan. Companies in the country also apply for a certain date for their meetings via internet.

The FSC has also decided to require listed firms to include business reports and audit reports in their notification on the meeting of stockholders. Under the changed rule, the firms should give the notice four weeks prior to the day, not the current two weeks, to allow sufficient time for stockholders to study the meeting agenda. This will lead companies to have their annual meetings of shareholders around May instead of March, considering that the reports are typically completed at the end of March.

The companies will also be obliged to clarify reasons of recommendation when they nominate a director, and hand in duty performance plan of outside director candidates. The FSC will require the companies to notify salary and compensation of directors. The financial watchdog plans to hold a hearing in May and seek to revise related rules within this year.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]