As we explained in detail in a previous newsletter, Korea’s financial regulatory authorities—including the Financial Services Commission (the “FSC”), the Financial Supervisory Service, and the Korea Exchange (the “KRX”)—previously announced measures to improve corporate disclosures by strengthening English-language disclosures and disclosures of the results of shareholders’ meetings, with a view to enhancing access to capital markets and protecting the rights and interests of minority shareholders (Link). In furtherance of the foregoing measures, on January 28, 2026, the FSC amended the Regulations on Issuance and Disclosure of Securities and the KRX Disclosure Rules for the KOSPI Market, KOSDAQ Market, and KONEX Market (Link). Among the amendments, the strengthened requirements relating to the disclosure of the voting results of shareholders’ meetings will also apply to 2026 annual general meetings of shareholders (“AGMst”), and are therefore drawing significant attention from market participants and companies. The details are as follows.
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Expansion of Mandatory English-Language Disclosures
The Phase 2 mandatory English disclosure requirement will take effect in May 2026. Accordingly, the scope of companies subject to mandatory English disclosures will be expanded to include all KRX Securities Market (KOSPI) listed companies with total assets of KRW 2 trillion or more. In addition, the scope of disclosure items will be expanded beyond AGM results to cover a broad range of KRX disclosure items, including (i) all material corporate events and key management matters (55 items), including matters relating to business and investment activities, (ii) fair disclosures, (iii) inquiry disclosures, and (iv) other KRX disclosure categories. The filing deadlines will also be shortened through a future amendment to the KRX disclosure rules and their detailed implementing regulations. In principle, large-scale KOSPI-listed companies with total assets of KRW 10 trillion or more will be required to submit the English-language disclosure to the KRX on the same day the corresponding Korean-language disclosure is filed. Other KOSPI-listed companies with total assets of KRW 2 trillion or more will be required to submit the English-language disclosure to the KRX within three business days after filing the corresponding Korean-language disclosure.
In addition, Phase 3 mandatory English disclosure, which will expand mandatory English-language disclosure to all KOSPI-listed companies, is planned to be implemented in March 2027, more than one year earlier than the previously announced target of May 2028.
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Enhanced Disclosure of Voting Results of Shareholder Meetings
The strengthened disclosure requirements for voting results at shareholders’ meetings will take effect in March 2026. Currently, companies disclose only whether each agenda item was approved or rejected. Under the amended rules, however, they will be required to disclose, on the date of the shareholders’ meeting, the voting results for each agenda item (including the percentage of votes cast “for,” “against,” and “abstaining”). In addition, companies will be required to disclose in periodic reports such as the annual report, the agenda-by-agenda voting results for shareholders’ meetings held during the reporting period (including the percentages “for,” “against,” and “abstaining,” as well as the number of voting shares exercised for each agenda item).
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Strengthened Executive Compensation Disclosure
Strengthened executive compensation disclosure requirements will take effect in May 2026. To facilitate a clearer assessment of the relationship between company performance and executive compensation, companies will be required to present, together with the disclosure form for total compensation of all executives, key performance metrics such as three-year total shareholder return (TSR) and operating profit. In addition, for each component of compensation, companies must disclose more detailed information regarding the rationale for the award and the calculation criteria. Further, to enable investors to better understand the true scale of executive compensation, including equity-based compensation, companies will be required to disclose, together with the existing disclosures on total compensation of all executives and individual compensation, equity-based compensation such as restricted stock units (RSUs). Companies must also present the cash-equivalent value of unvested (unrealized) equity-based awards.
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These disclosure reforms may have a significant impact on corporate governance matters, including the operation of meetings of boards of directors and shareholders, as well as decisions regarding executive compensation, and therefore require careful attention.
Once information regarding decision-making—such as agenda-specific “for/against/abstaining” percentages—is disclosed in greater detail, companies may face ongoing pressure even where minority shareholder proposals are defeated, particularly if the gap between support for the company’s position and shareholder-backed alternatives is narrow.
As previously noted, executive compensation decisions have become a particularly sensitive issue in light of questions regarding limitations on voting rights of interested shareholders in resolutions on executive compensation limits at shareholders’ meetings (Link). In this context, enhanced executive compensation disclosures, especially those revealing detailed calculation standards, may trigger significant debate, including around advisory shareholder proposals on executive compensation (so-called “Say-on-Pay”).
In addition, as English-language disclosures expand, inquiries and engagement by foreign institutional investors and activist funds may increase.
[Korean Version]
