Shareholders of Hyundai Motor Co. and parts-maker Hyundai Mobis Co. Ltd. rejected Elliott Management Corp.'s proposals for a one-time payout of 7 trillion South Korean won in dividends and a rejig of the board during the parent Hyundai Motor Group's March 22 annual general meeting, handing the activist investor a defeat in its ongoing proxy war with the companies, Bloomberg News reported.
The shareholders instead voted in favor of Hyundai Motor paying a total of 1.1 trillion won in dividends for 2018 and Hyundai Mobis paying a total of 2.6 trillion won over the next three years.
Elliott, which holds a 3% stake in Hyundai Motor and a 2.6% stake in Mobis, also failed to secure the required two-thirds majority vote for its proposal to expand the board size to 11 members from nine. However, shareholders voted in favor of the hedge fund's resolution to form committees overseeing director compensation, corporate governance and communication, Bloomberg said. They also agreed to the appointment of independent directors by Hyundai Motor and Mobis.
In a letter to shareholders after the vote, Hyundai Motor President and CEO Won Hee Lee said the results will enable Executive Chairman Euisun Chung to go ahead with his plan of completing the restructuring of the businesses. Chung's plan includes focusing on future mobility business, launching new Palisade and Sonata models and increasing competitiveness.
Lee acknowledged the opposition from Elliott and said the views of dissenting shareholders "will not go unnoticed and will be valuably treated."
Ahead of the vote, Hyundai's proposals received backing from South Korean pension adviser Korea Corporate Governance Service, a major shareholder, and U.S. proxy adviser Glass Lewis & Co. LLC, while Institutional Shareholder Services Inc. recommended Hyundai shareholders vote in favor of the hedge fund's board director nominees.
Hyundai Motor's shared slipped 0.8% at market close in Seoul, while Mobis' stock was up 0.47%.
As of March 21, US$1 is equivalent to 1,130.34 South Korean won.