[CEONEWS = Editor-in-Chief Lee Jae-hoon] In the Korean corporate landscape, LG has long been dubbed the “quiet conglomerate.” Unlike Samsung, it hasn’t been mired in endless legal battles, nor has it faced constant labor disputes like Hyundai Motor. From the outside, LG appears to be marked by stable management and steady numbers. But this calm may be an illusion. Over the past seven years since Chairman Koo Kwang-mo took the helm, LG has been intensely focused on internal restructuring and risk management. This column takes a comprehensive look at LG’s governance, legal disputes, investments, and business structure to uncover the real face behind its so-called “windless empire.”
■ Personal Background & Leadership DNA: The Path of an Adopted Heir and Quiet Decisions
Chairman Koo Kwang-mo became the designated successor of LG by being adopted as the son of the late Chairman Koo Bon-moo. This shift from “nephew to adopted son” wasn’t just a personal choice but a strategic move to solidify the legitimacy of LG’s ownership structure. At the same time, it placed a heavy burden on Koo’s shoulders.
His leadership can be summed up as “quiet determination.” Rather than flashy rhetoric or grand declarations, Koo emphasizes execution and structural transformation. From the beginning, he focused on separating family-related risks from corporate ones—a goal epitomized by the 2021 spin-off of LX Group. By decisively spinning off non-core businesses, LG streamlined into a holding company–core subsidiary structure. This minimized conflict between family matters and the value of listed companies, earning the nickname “quiet restructuring”—a defining image of Koo’s leadership.
■ Shares & Governance: 15.96% Stake and a Defense Line of Friendly Shares
At the heart of LG’s governance lies the holding company LG Corp. Chairman Koo holds a 15.96% personal stake, and when combined with stakes held by affiliates and long-term institutional investors, the total friendly ownership reaches approximately 41.7%—considered a stable defensive line in the business world.
Since Koo's appointment, LG Corp has enhanced shareholder return policies focused on share buybacks, cancellations, and dividend increases. Previously, treasury shares were primarily used to protect controlling interests; now, they clearly convey a message of capital efficiency and shareholder value enhancement. LG Electronics executed its first-ever share cancellation, and LG Uplus announced a ₩100 billion cancellation alongside an ₩80 billion buyback.
This isn’t merely about defending shares; it's about reinforcing the equity structure between the holding company and subsidiaries to strengthen consistency in control. These actions also respond to rising demands from global pension funds and proxy advisors for more sophisticated capital policies involving dividends, cancellations, splits, and mergers.
■ Succession & Legal Disputes: Family Lawsuits and the Double Burden of Inheritance Tax
LG’s risks have originated more from within than from external forces. Chairman Koo is currently facing two major legal challenges.
The first is a family inheritance lawsuit. Initiated in February 2023 by his mother and sisters, this ongoing case is rare in LG's history. While it’s unlikely to shake Koo’s control, depending on the outcome, slight adjustments to the ownership structure may be unavoidable.
The second involves an inheritance tax dispute. In an administrative lawsuit concerning a multibillion-won tax assessment, the first trial ruled against Koo. The case is now in appeal, but the process is dragging on due to reopened hearings and schedule changes.
This issue goes beyond just tax payments—it could influence LG’s entire capital policy, including treasury shares, dividend policies, and debt structures.
Ultimately, both lawsuits impact LG across three dimensions: reputation, governance, and cash flow. The real question isn’t the scale of the risk, but how precisely it’s managed. LG must continue to mitigate these risks through proactive disclosures, regular communication, and technical adjustments.
■ M&A & Investments: LG’s ‘Targeted Absorption Strategy’
Unlike competitors who pursue high-profile megadeals, LG adopts a precise, needs-based approach to M&A. LG Electronics acquired a service-ready robotics platform company, aiming to integrate hardware, OS, and services—not just bolster hardware. LG Chem signed long-term supply contracts with North American automakers and is building a cathode plant in the U.S. Southeast, while establishing a lithium supply chain across Latin and North America to respond to IRA regulations.
LG Display focused on capital increases and OLED conversion to regain financial strength, while LG Household & Health Care is revamping its brand and sales channels amid poor performance in China.
LG’s M&A strategy prioritizes practical returns over showy scale, focusing on return on invested capital (ROIC).
■ Business Portfolio: LG’s Strength in Numbers
LG’s business portfolio blends stability and ambition.
In energy solutions, LG is facing demand volatility in North America’s EV market, but is pivoting some EV battery lines to ESS, aiming for 30GWh production capacity by 2026. The electronics division builds on solid profits from premium appliances, with added growth potential in automotive parts, robotics, and platforms.
OLED conversion is a key variable for LG Display’s profitability. LG Household & Health Care, hit by declining Chinese sales, is working to improve its fundamentals. Meanwhile, the holding company is addressing NAV discounts through share buybacks, cancellations, and dividend policies.
While LG’s strength lies in stable cash flow and localized global investments, its ability to manage volatility is becoming a critical benchmark.
■ Risk Matrix: Invisible Turbulence
LG’s risks are not always visible, but they are far from small.
Family lawsuits and inheritance tax issues don’t undermine its governance foundation but do demand fine-tuned capital adjustments. EV market cycles and IRA regulations directly affect battery and materials margins, while weak Chinese consumption adds uncertainty to the household goods segment. OLED transitions remain a challenge in terms of both yield and demand.
On top of this, pressure from the National Pension Service and global proxy advisors has intensified, placing LG under scrutiny across dividends, cancellations, and ESG governance.
LG’s real challenge lies not in visible storms, but in the unseen turbulence beneath the surface.
■ Strategic Scenarios: Five Keys to LG’s Second Leap
Scale-Up of Capital Policy: LG must go beyond basic dividends and cancellations. Regular cancellations, increased dividends, and even in-kind dividends from subsidiaries may be needed to address NAV discounts.
Strengthening the Robotics–EV Components–Materials Triangle: Robotics should move toward data-driven recurring revenue models. EV components can cushion downturns, and materials must pursue vertical integration to reduce margin volatility.
Data Industrialization: LG’s data from appliances, EV components, and consumer goods is a foundation for a lifestyle OS. Integrating AI, edge computing, and on-device technologies can create new platform revenue models.
Refining Global Localization Strategy: Compliance with IRA and EU regulations is about more than scale—it’s about precise adherence to regulatory standards.
Leadership Through Transparency: Koo Kwang-mo’s low-key style demands that financial performance and disclosures speak for themselves. Disclosing decisions and data proactively can turn LG’s “calm” into market “premium.”
■ The Price of Quiet—and the Next Sentence
Under Koo Kwang-mo’s leadership, LG has quietly reshaped itself over the past seven years through spinoffs, inheritance tax planning, treasury share policies, and surgical M&A.
While solid governance, cash flow control, and global localization have helped absorb risks, external headwinds—from the EV cycle slowdown to weak Chinese demand and OLED challenges—continue to affect its earnings trajectory.
LG’s success doesn’t hinge on its quietness alone. It depends on how swiftly it detects invisible turbulence, contains it with numbers, and convinces the market through transparent disclosure.
Now, the market asks:
“Where will Koo Kwang-mo write his next sentence?”
The answer won’t be in declarations, but in execution—through dividends, share cancellations, M&A, and disclosure.
The weight of LG’s public performance will be the real price tag of its “quiet empire,” and the foundation of its premium.
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