Samsung Electronics Shakes Up Top Leadership Lineup

By Eun-Young Jeong and Timothy W. Martin Features Dow Jones Newswires

Samsung Electronics Co. has made sweeping changes to its leadership by replacing its division heads and separating the role of its CEO and board chairman for the first time while calling for fresh thinking even as it delivered another quarter of record profits.

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On Tuesday, the South Korean technology company said it would replace its components, consumer electronics and mobile division heads. It will maintain its three co-CEO structure, positions that were previously filled by the division heads, though the company didn't say whether the new appointees would take on CEO roles.

To say Samsung is experiencing a leadership crisis is an understatement. The company's chairman is incapacitated, the de facto leader is in prison and the conglomerate's powerful strategy group has been disbanded.

The new appointees are Kim Ki-nam for components, Kim Hyun-suk for consumer electronics and Koh Dong-jin for the mobile division.

In addition to a personnel shake-up, Samsung said it is looking to separate the roles of board chairman and CEO for the first time. Both roles were previously held by Kwon Oh-hyun, who is a co-CEO.

On Oct 13 when he said he would step down, Mr. Kwon called for a fresh start, saying Samsung is "hard pressed to find new growth areas right now." In a statement on Tuesday, he described the new division heads as leaders "well suited to accelerate the pace of innovation and address the demands of the connected world" and said they had "proven track records."

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Since 2013, Samsung has operated with a three-CEO system, created in part to assure competitors that each unit was independent. Mr. Kwon oversaw the components business, while Yoon Boo-keun and Shin Jong-kyun ran units focused on consumer electronics and mobile devices.

Mr. Kwon's board chair seat is expected to be filled by former Chief Finance Officer Lee Sang-hoon, whose exit from that position was also announced Tuesday. Mr. Lee is expected to take over in March.

Earlier Tuesday, Samsung delivered a record quarterly profit for the second time this year, as it continues to cash in on strong demand for its electronics components.

The Suwon, South Korea-based tech giant said third-quarter net profit rose to 11.19 trillion South Korean won ($9.95 billion) from 4.54 trillion won a year earlier. Samsung shares rose 1.9% to finish at a record high Tuesday, outpacing the broader index's 0.9% gain.

Samsung's de facto leader, Lee Jae-yong, was convicted in August for bribing South Korea's former president. Mr. Lee has appealed the decision.

Write to Eun-Young Jeong at Eun-Young.Jeong@wsj.com and Timothy W. Martin at timothy.martin@wsj.com

(END) Dow Jones Newswires

October 31, 2017 02:59 ET (06:59 GMT)