Kakao leadership hit for naming ex-KakaoBank CTO
The leadership of incoming Kakao Corp. CEO Chung Shin-a is coming under serious doubt, as illustrated and amplified by the appointment of former chief technology officer (CTO) of KakaoBank Jung Guedon as its new CTO, market watchers said Wednesday.
Critics say the repeated appointments of managerial figures who had stirred controversy serve as evidence of a continued institution-wide failing of the tech titan, wildly undermining Chung’s earlier pledge of innovation and fundamental overhaul to regain the public’s trust.
Jung was the central figure in the 2021 KakaoBank stock options controversy to the amount of over 7.6 billion won ($5.6 million). He exercised stock options to net 6.6 billion won on Aug. 10, 2021, three days after the listing of the bank. He sold 106,000 shares at a per-price of 62,336 won. Two weeks later he sold the 11,234 remaining shares, cashing 1 billion won. The bank’s shares took a dive that year from the peak of 91,000 won on Aug. 20.
Jung’s cashing in, deemed unethical by many, has drawn parallels to former Kakao Pay CEO Ryu Young-joon’s selling of company shares. He celebrated the firm’s listing on Nov. 3 of the same year, only to sell off his shares to net 46 billion won. It was about half of 90 billion won in gains raked in by Ryu and a few managerial figures at the firm in a stock sell-off less than a month after the firm’s listing.
Kakao maintains Jung is a perfect fit to lead the firm’s technological advances since he has a deep understanding of complex services and relevant technologies.
Also factored in is his experience in elevating the bank subsidiary to the status of the country’s leading online financial services provider.
The firm said Jung’s expertise in technology has greatly helped Kakao’s advancement, which is why he has worked closely with Kakao since the bank’s launch.
“He has expertise in internet technology, defined by the integration of complex technological features and easy-to-use functions for financial services,” the firm said Monday.
Kakao Compliance and Trust Committee, an outside monitoring body independent of the group management, is facing growing calls to evaluate the appointment.
The committee faulted the management for growing distrust of Kakao affiliates last month.
“The new leadership should establish rules and codes of conduct for managerial figures, including ways to bolster corporate values, fairness, communications and responsibility,” it said.
Unionized workers of Kakao criticized the appointment.
“In a recent survey of Kakao employees, we made it clear that the act of pursuing and advancing personal interests and the hiring of a figure in a close-knit circle of managerial figures should be avoided at all costs. Jung clearly fails by both standards,” the union said.
“The appointment is not final. We are in the process of continued discussion,” a Kakao official said.