- ISS finds that Palliser's proposals are "deliberately structured to promote transparency and secure meaningful commitments"
Palliser Capital ("Palliser") welcomes the endorsements of independent proxy advisory firms Institutional Shareholder Services ("ISS") and Glass, Lewis Co. ("Glass Lewis") in favor of its proposals for the upcoming Ordinary General Meeting of Shareholders of LG Chem, Ltd. ("LG Chem" or the "Company") on March 31, 2026.
Palliser has engaged in continuous dialogue with the Company on the root causes of its KRW 60 trillion (US$41 billion) value gap; however, we believe that decision-making continues to be misaligned with the interests of minority shareholders. Palliser has put forth two amendments to LG Chem's Articles of Incorporation ("Articles") to establish mechanisms to amplify the minority shareholder voice in the boardroom: (#2.7) allowing advisory proposals, including three advisory sub-resolutions relating to core value-up principles; and (#2.8) appointing a Lead Independent Director.
ISS recommended shareholders vote for both Articles amendments, as well as all three advisory proposals, including the proposal requiring the Company to disclose Discount to NAV as a key financial metric. Glass Lewis endorsed the Articles amendment allowing for advisory proposals, as well as two of the advisory sub-resolutions.
Key points from their recommendations include:1
ISS:
- "LG Chem's TSR underperformance reflects not only the operational challenges facing its core non-battery businesses, but also the persistence of a deep conglomerate discount… recent steps designed to address it appear too conservative to meaningfully narrow the valuation gap."
- "[Palliser's] campaign centers on management's apparent reluctance to recognize and resolve a fundamental flaw in its capital allocation strategy."
- "… the dissident proposals represent a necessary intervention in light of LG Chem's performance challenges, capital allocation shortcomings, and governance concerns."
Glass Lewis:
- "[The proposals] could provide minority shareholders with a structured channel to communicate their views without limiting the board's authority or discretion in decision-making."
- "…the introduction of such a framework represents a proportionate governance enhancement that facilitates shareholder expression while preserving board flexibility."
- "If the discount proves structural and persistent, additional disclosure could improve market understanding."
With support from both leading independent proxy advisors and favorable votes already disclosed by several long-term institutional holders, Palliser encourages minority shareholders to vote FOR a stronger voice
James Smith, Founder and Chief Investment Officer of Palliser, said: "We are encouraged that both ISS and Glass Lewis have recognized LG Chem's significant potential, and the urgent need to address governance shortcomings. It is clear the company has an opportunity to strengthen shareholder protections while leading efforts to eliminate the 'Korea Discount.'"
Further information regarding Palliser's proposals can be found in our public "Recharge LG Chem" presentation.
About Palliser Capital
Palliser is an alternative investment manager that applies a value-oriented, event-driven philosophy to investing across a range of distinct yet complementary strategies on a global basis with a focus on situations where positive change and value enhancement can be achieved through thoughtful, constructive, and long-term engagement with companies and across a range of different stakeholder groups.
1 Permission to use quotes was neither sought nor obtained.
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Prosek Partners
Forrest Gitlin Kiki Tarkhan
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