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| Yoon Ho-young, fourth from left, then co-CEO of Kakao Bank, poses with other dignitaries during a ceremony to mark the company's launch at the Floating Island Convention Center in southern Seoul in this photo taken in 2017. Yoon served as the sole chief of the internet banking arm of Kakao Corp. after another Co-CEO Lee Yong-woo, eighth from left, resigned in January 2020. Korea Times file |
By Yi Whan-woo
Kakao Bank CEO Yoon Ho-young was found to have dumped massive stakes in the company for a quick profit ― the latest in a series of mass selling of Kakao shares by its executives that led to minority shareholders' cries of betrayal.
According to financial industry sources, Wednesday, Yoon exercised the stock option to sell "tens of thousands" of the 260,000 shares he holds in Kakao Bank in the fourth quarter of 2021.
Yoon joins eight executives from Kakao Pay, the mobile payment business arm of IT giant Kakao Corp., who sold a combined 440,933 shares of the company they received as their stock options on Dec. 10. They collected an approximate combined profit of 90 billion won ($75 million).
Among the eight was incoming CEO Ryu Young-joon, who later expressed his will to resign amid escalating criticism.
The exercise of stock option is stipulated on Kakao Corp.'s regulation and the aforementioned nine executives' mass sell-off is within its regulatory bounds.
Their choice, however, prompted controversy over lack of commitment to shareholder value and social responsibility.
In case of Kakao Pay, the mass sell-off prompted a slide in the stock price which lost more than 25 percent of its worth in a month. It especially infuriated minority shareholders because it took place only a month after Kakao Pay went public.
The sell-off was also perceived to be against spirit of the company's innovative entrepreneurship, considering stock options were awarded as part of Kakao Corp. founder Kim Beom-soo's bid to nurture CEOs with commitment and independent thinking.
The IT giant has capitalized on its technological prowess to advance to a wide range of financial services, and accordingly, has more than 100 affiliates with respective CEOs.
Against this backdrop, Kakao Bank explained Yoon's sales of his shares should not be misinterpreted and that it is "solely a reward for leading the company faithfully."
The company pointed out that, in order to exercise stock option, its CEO must fulfill certain criteria such as having their company achieve pretax income of 130 billion won or more and having more than 130 customers.
The firm also pointed out Yoon did not exercise the stock option all at once in line with the company's regulations and that any further exercise will not be granted until his term ends in March.
To prevent morally irresponsible sell-offs, Kakao Corp. announced on Jan. 13 that CEOs and executives of its affiliates will be prohibited from exercising stock options within two years and one year after the listing day, respectively.
Also, two or more executives cannot jointly sell company shares to prevent a drastic change in the stock price.
Additionally, executives must notify the control tower and the affiliate company's investor relations team of when and how many shares they are planning on selling before carrying out an actual sale.
Amid the controversy, Kakao Bank shares fell 3.46 percent and closed at 41,800 won, Wednesday.
