Kakao, which has declared a human division (spin-off), firmly dismissed rumors that it may sell major subsidiaries such as KakaoBank and KakaoPay after the split, stating, "There has been no consideration or discussion whatsoever." The company also announced its intention to consult with the board of directors on a structure that reflects stock price in executive evaluations and compensation.
On the 20th, Kim Do-young, KakaoX CEO-designate, stated this at the "Second Meeting with Minority Shareholders" held at the FKI Tower Conference Center in Yeongdeungpo-gu, Seoul. The meeting, conducted simultaneously online and offline, was attended by key executives who exchanged views with minority shareholders on topics including △the purpose of the human division △growth strategies after the split △and corporate valuation and measures to enhance shareholder value.
On-site, minority shareholders raised numerous points demanding accountability from management if the stock price fails to recover. In response, Kim stated, "We will decide in consultation with the newly formed board of directors on a plan to reflect shareholder value in executive evaluations or compensation," adding, "Performance bonuses and incentives will be determined based on stock price or shareholder value."
He dismissed proposals for subsidiary sales raised by some parties, stating that no discussions have taken place. Regarding the push for an American Depositary Receipt (ADR) listing of Kakao Mobility in the U.S., he explained, "Investors in Kakao Mobility hold contractual rights to lead a listing after a certain period has passed." However, the Kakao board of directors opposed the ADR listing push last month on the grounds that it would be disadvantageous to general shareholders and offer no practical benefit to the company.
Questions were also raised as to whether KakaoX might be undervalued in the market due to its subsidiary-centric business structure. In response, Kakao stated that after the split, it will disclose in detail the performance and growth strategies of major businesses such as tech-finance, content, and mobility, ensuring that the value of each business is fully reflected in market evaluations, thereby narrowing the gap between net asset value and market valuation.
Doubts were also raised regarding the necessity of the human division. Kakao explained, "There are limitations to promoting the cultivation of AI, KakaoTalk, advertising, and commerce businesses, as well as the growth and investment of major affiliates, within a single decision-making framework." It further emphasized, "As structural change is necessary to respond to rapid changes in the AI industry, we will enhance business-specific expertise and decision-making speed through the human division, thereby improving corporate valuation and shareholder value."
Plans for shareholder returns after the split were also announced. Kakao plans to utilize 30% of dividends from KakaoX's subsidiaries and investment gains as a source for shareholder returns, and intends to push forward with share buybacks and cancellations totaling 300 billion won after the split. KakaoAI also reaffirmed its plan to allocate 20% to 35% of its separately adjusted free cash flow (FCF) to shareholder returns. If FCF increases by more than 50% year-on-year, the return ratio can be expanded up to a maximum of 40%.
Kim stated, "Raising corporate valuation and shareholder value through the human division is a primary goal of this structural reform," adding, "We will do our utmost to build trust by executing growth strategies with momentum and sufficiently explaining the purpose of the split and future growth strategies to shareholders."
in TECH
