South Korea’s SM Entertainment appointed a new CEO on Friday following the recent battle for control of the K-pop powerhouse.
A new board of directors and new CEO were appointed following confirmation earlier last week that South Korean internet firm Kakao now has a 40% controlling stake in the SM business.
The K-pop company's management team supported an alliance with Kakao, but its founder and until recently largest shareholder Lee Soo-man did not. He tried, ultimately unsuccessfully, to orchestrate an alliance between SM and rival K-pop outfit Hybe instead.
With Kakao now in control of the company and a new board in place, Lee's influence over SM is pretty much over. He hadn't had a formal role there for some time, but still had lots of influence over the business as its biggest shareholder.
He also continued to receive significant production fees until last year. Both his ongoing influence and those production fees became somewhat controversial.
Lee's nephew Lee Sung-soo was co-CEO of SM, although he supported the Kakao partnership. He is now standing down to allow a new era to begin at the company, which will see the full implementation of a new strategy that is dubbed SM 3.0.
The new CEO is Jang Cheol-hyuk, who joined SM as CFO last year. "Having been at the centre of the SM 3.0 transition drive coupled with his track record", an official statement said, "the board found him the right person to effectively respond to the rapidly changing domestic and international market environment and faithfully implement mid- to long-term corporate strategies".
Jang himself added: "I feel a great responsibility to assume the position as a CEO when SM is about to take a big leap forward with SM 3.0. We will establish transparent governance structure and faithfully implement the SM 3.0 strategy, so that SM can become a fan- and shareholder-centered global entertainment leader while continuing to communicate closely with our artists, fans, shareholders and employees".
Although Lee Soo-man sold most of his SM shares to Hybe as part of his bid to stop the Kakao alliance, he still owns around 3% of the company. Hybe also retains an 8.8% stake, despite it trying to offload all of the SM shares it bought to Kakao.