FCP Sends Orion Second Open Letter, Questions Owner Couple's Compensation and More

"Stock-price-linked compensation is moral hazard"
Also questions the vice president's promotion process

Activist investor Flashlight Capital Partners (FCP) sent Orion a second open letter demanding explanations about the owner family's compensation and promotion process. FCP said Orion had not accepted its previously proposed corporate governance reforms and also demanded the disclosure of materials related to the board of directors.

An FCP representative said on November 11, "We received Orion's response to our first open letter on November 6, but judged it insufficient and therefore sent a second open letter today." FCP also requested to inspect and copy the minutes of board meetings and asked Orion to respond by November 20.

On October 19, FCP asked Orion to take five steps: appoint members of the owner family as registered directors or have them manage the company without compensation; link executive pay to the share price; expand shareholder returns; halt the acquisition of JoongAng Ilbo; and review its pet food business. An FCP representative said, "Orion denied on October 22 that it was participating in the acquisition of JoongAng Ilbo, and rejected the remaining requests on November 6."

FCP took particular issue with Orion's rejection of linking executive pay to the share price, citing the risk that it could encourage "moral hazard." According to FCP, Orion Group Chairman Dam Cheolgon and Vice Chairwoman Lee Hwakyeong, both unregistered executives, received total compensation of 20.5 billion won over the four years from 2022. FCP claimed that their combined annual compensation exceeded the total compensation of all registered directors each year. It also pointed out that they received compensation separately from the director compensation limit set at the shareholders' meeting.

FCP also questioned the promotion process of Vice President Dam Seowon, the eldest son of Chairman Dam and Vice Chairwoman Lee. After working at Kakao Enterprise for about one year, Dam joined Orion as a senior general manager in July 2021. He was promoted to managing director in January 2023 and to vice president in January this year.

Citing Orion's 2025 business report, FCP said current executives who joined the company as general employees took an average of 24 years to be promoted to managing director, and were an average of 51.5 years old at the time of promotion. By contrast, Dam was promoted to managing director at age 33, just one year and six months after joining the company, FCP said, demanding an explanation of the promotion process and records of the compensation he had received to date.

This content was produced with the assistance of AI translation services.