Proxy advisor Glass Lewis recommends KT&G investors re-elect company directors

KT&G

17/03/2023 15:26

NEW YORK, March 17 (Reuters) - Proxy advisor Glass Lewis
on Friday urged investors in Korean tobacco conglomerate KT&G
 033780.KS  to re-elect the company's directors, recommending
against candidates and proposals presented by two activist
investment firms.
    KT&G, previously known as Korea Tobacco & Ginseng and valued
at $8.6 billion, is facing pressure from activist investors
Flashlight Capital and ANDA Asset Management.
    The two investment firms, which are not working together,
are both pushing the company to announce bigger dividends and
additional share buybacks, spin off the ginseng business, and
optimize its balance sheet. 
    "We do not believe the dissidents have made a sufficiently
compelling argument to warrant supporting their platform at this
time," Glass Lewis wrote.
    Glass Lewis' report contrasts with that of its larger rival,
Institutional Shareholder Services (ISS), which urged investors
to elect director candidates nominated by the activist investors
and support their proposals to return more cash to shareholders.
    Glass Lewis recommended that investors back management's
proposed dividend payments, calling the higher dividend
proposals made by the activists "excessive".
    The proxy advisor held two in-person meetings with the
company last year but did not meet with the activists, according
to the report. 
    Large investors often follow the recommendations of proxy
advisory firms. 
    First Eagle Investment Management, BlackRock and Vanguard
Group rank among KT&G's biggest investors. The company's annual
general meeting is scheduled for March 28.

 (Reporting by Svea Herbst-Bayliss; Editing by Jan Harvey)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))