VP Han apologizes to Samsung Electronics shareholders
Samsung Electronics Vice Chairman Han Jong-hee apologized to shareholders on Wednesday as Korea’s biggest company grapples with a stock price drop, customer complaints, manufacturing issues and service issues. workforce.
To drive home the point, he left the podium and bowed to the assembled shareholders.
“We apologize once again for not responding properly to customer needs from the start,” Han said.
Samsung Electronics held its 53rd annual shareholders’ meeting on Wednesday morning at the Suwon Convention Center in Gyeonggi.
Three points were put to shareholders – the approval of the annual report, the election of board members and auditors and a payment limit for board members – and despite the general feeling of dissatisfaction, all the items on the agenda were adopted.
At the center of the storm is an app installed by default on Samsung Electronics devices that slows processor performance when users run data-intensive apps like games.
Thousands of disgruntled Galaxy users in Korea are threatening to file a class action lawsuit against Samsung Electronics, demanding 300,000 won ($242) per user in compensation. A community hosted by Naver organizes the group and 7,600 people had joined the community by Wednesday afternoon.
More than 1,500 people joined the trial on Monday, according to a representative for the group.
Following strong user response, Samsung Electronics has rolled out a new software update that allows the Game Optimizing Service (GOS), as the app calls it, to be disabled by users.
Han took the time during the meeting to explain the origins of the problem.
The GOS app has intentionally reduced the data processing speeds of the processors, but to prevent overheating while running the game apps, because “the GOS app is intended to optimize the performance of the phones taking into account the different characteristics games,” according to Han.
“We will respond better to customer calls to make sure the same issue doesn’t happen again,” Han said. “We will make amends by prioritizing the customer experience and providing quality products and services.”
During the meeting, Kim Han-jo was recommended to replace Bahk Jae-wan as chairman of the board. Two independent directors, Han Wha-jin and Kim Jun-sung, were recently added to the board. For executive directors, Kyung Kye-hyun, Roh Tae-moon, Park Hark-kyu, and Lee Jong-bae have been suggested. Kim Jeong was a candidate for re-election.
The three points passed successfully, even though shareholders had threatened to vote against Roh Tae-moon’s election as a board member.
Roh is leading the mobile experience business and blamed for the GOS issue by consumers. Angry investors posted photos of ballots online with votes against Roh. He was elected with 98 percent approval.
After the meeting, some users from the Samsung Members community expressed their dissatisfaction online, saying that Samsung Electronics had not provided sufficient answers to shareholders.
They pointed out that Roh should have come forward to explain the GOS incident in detail, and blamed Han for giving half-hearted answers and being light on details.
Han said the phones wouldn’t overheat thanks to a temperature-tuning algorithm “that doesn’t hamper smartphone performance,” without further explanation.
“We will do our best to make the business grow and our products sell well,” he said at the meeting.
Roh apologized to company employees, but not to consumers.
“Do you really call that an apology?” read a post.
“It’s my fault that I thought I would get something out of today’s meeting,” read another.
Both were released Wednesday after the meeting.
Other concerns addressed by shareholders included chip issues, falling stock prices and a possible strike.
Samsung Electronics is grappling with semiconductor yield issues and could also face the first-ever walkout in its 52-year history if negotiations break down on Friday.
Kyung, head of the device solutions division, said the company expects better chip production in the coming years.
“It took a while to ramp up the activity at first, but it’s gradually leveling off,” he said.
“We cooperate with Qualcomm on many levels and expect more.”
The company’s stock price has been weak year-to-date, losing more than 10% in the past three months. This has angered retail investors, who are attacking the company for giving generous bonuses to company employees as the stock falls.
On Wednesday, it closed at 70,400 won, up 1.3%.
The company will showcase a new model in the affordable Galaxy A range at an online event on Thursday and sit down at the negotiating table with its union on Friday.
BY YOON SO-YEON [[email protected]]