x Abu Dhabi, UAEMonday 18 December 2017

Samsung hunts for new leader after CEO resigns

Oh-Hyun Kwon will step down amid an ‘unprecedented crisis’

Kwon Oh-Hyun, Samsung Electronics chief executive, steps down from post. SeongJoon Cho / Reuters
Kwon Oh-Hyun, Samsung Electronics chief executive, steps down from post. SeongJoon Cho / Reuters

Samsung Electronics chief executive, Oh-Hyun Kwon, will leave the company after more than three decades citing a necessary change in leadership during an “unprecedented crisis”, the company said on Friday.

Mr Kwon said that he had been considering the decision for “quite some time” and will also not seek re-election to the board when his position expires in March. “As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry,” he said in an email to employees.

“But now the company needs a new leader more than ever and it is time for me to move to the next chapter of my life.”

Mr Kwon joined the electronics giant as a researcher of the company’s semiconductor institute in the US in 1985. He moved up the ranks to become the head of Samsung’s semiconductor unit and then chief executive of Samsung Display in 2016. However, his most important role was becoming the public figure for Samsung after the heir, Lee Jae-yong, was detained and sentenced to five years in jail for a corruption scandal that involved dismissing South Korea’s first female president, Park Geun-hye.

Mr Lee was convicted of making payments and gifts to win government favour for a large restructuring of Samsung, putting together two units that would help the heir have more power over the conglomerate. He has denied the charges and is appealing the judgement.

“Nobody wants to be the chief of Samsung Electronics at a time like this; it’s too risky,” Park Ju-gun, who tracks corporate executives at CEOScore, told Bloomberg. “It puts that person at odds with the controlling family. Only when he is in the shadow is he playing his role properly.”

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Despite the surprise move of Mr Kwon, Samsung is doing well reporting a 30 per cent increase to US$55 billion in revenues in the third quarter compared to a year earlier, with operating profit standing at around $12.8bn.

Mr Kwon said: “There are no words to describe how proud I am that we built together one of the most valuable companies in the world. We have come a long way to create a company that truly changes how people live, work and communicate with each other.”