POSCO board grants new CEO 3-year tenure

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SEOUL, Feb. 6 (Yonhap) -- The board of POSCO Co., the world's fourth-largest
steelmaker, decided Friday to guarantee its new chief executive officer (CEO) a
tenure of three years in order to ensure managerial stability amid the global
economic downturn, company officials said.
The decision came as incumbent CEO Lee Ku-taek offered to resign in mid-January
before his three-year tenure ends in next February, which means his replacement
will only fill the remaining one year of the term.
POSCO's outside directors recommended Chung Joon-yang, head of its construction
unit, as new chief last week, which should get the nod at a shareholders meeting
on Feb. 27.
"Rather than appointing Chung as an executive director again next year, the board
decided to grant him a new 3-year tenure," a company official said.
Lee, POSCO's CEO since 2003, said he was stepping down to pave the way for a new
leader to help POSCO through the current difficulties. But there has been
speculation that Lee had come under government pressure to resign, though he
denied it.
Chung will be tasked with battling a sharp industry downturn amid a global slump
in sales of vehicles and electronics goods.
POSCO, which made its first-ever production cut in December and January and
posted lower-than-expected quarterly earnings of 721 billion won (US$521
million). Last month, it warned that sales for the year would fall by up to 12
percent and steel output could drop by as much as 12 percent to 29 million tons.
The steel giant also said the board replaced five out of its nine outside
directors as their terms expired.
sam@yna.co.kr
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