이 기사는 2021년 11월 30일 08:06 thebell 에 표출된 기사입니다.

South Korea's Lotte Group has promoted Lee Dong-woo, CEO of the group's holing company Lotte Corp, to the group's vice chairman in its unconventional year-end personnel reshuffle.

Lee will take on the vice chairman role five years earlier than his predecessor Hwang Gak-kyu.

The South Korean group has given Lee stronger control over the company, with his role likely to more focus on leading investment activities, such as promoting new business and mergers and acquisitions (M&A), in the future instead of overseeing the group's affiliates or exercising a broader decision-making authority on management. This also seems in line with the group’s introduction of so-called headquarters-based structure, switching from the current business unit system.

The newly appointed vice chairman, born in 1960, represents the group’s determination to replace its top executives with younger faces. It took 34 years for Lee to become vice chairman after starting to build his career at Lotte Department Store in 1986. In contrast, it took 39 years for Lee’s predecessor Hwang to become vice chairman after joining Honam Petrochemical, currently Lotte Chemical, in 1979.

It is notable that Lee has achieved this independently, instead of taking advantage of a relationship with key figures in the group. According to industry experts, Lee has been favored by chairman Shin Dong-bin and has enjoyed the full confidence of Shin.

Lotte Group also announced plans to overhaul its business structure, introducing the headquarters-based structure. The shift is to grant stronger authority to each affiliate of the group.

As a result, Lotte Corp's power over the group's affiliate has reduced. Instead, the holding company now will focus more on investment, the company said. Vice chairman Lee already announced his goal to make Lotte Corp “a company that people want to invest in” at its extraordinary shareholders meeting held in the second half of last year.

While each affiliate is allowed to manage their own business, large-scale M&As and new businesses will be led by the holding company. Based on this strategy, Lee plans to work on expanding new businesses, including bio and healthcare.

“Lee has been in charge of the group's business strategy and finance as co-CEO of Lotte Corp since last year,” said an official at Lotte Group, adding, “He has contributed to ESG management and brand value enhancement, and is currently promoting new businesses such as bio and healthcare.” (Reporting by Seon-ho Kim)