Management Control & Shareholder Value
What Are the Issues with Poison Pills and Different Classes of Stock? 11 February 2026
SquareWell was quoted in a recent article by Yonhap Infomax (Feb. 11, 2026), titled “[경영권 방어와 주주가치②] 포이즌필·차등의결권, 문제점은” (“Management Control & Shareholder Value②: What Are the Issues with Poison Pills and Dual-Class Shares?”). The article examines the renewed push in Korea to introduce poison pills (shareholder rights plans) and dual-class shares as takeover defenses, and the governance concerns raised by investors and academics.
It highlights that Korea’s ownership structure already limits the likelihood of hostile takeovers. According to analysis cited from Align Partners Capital Management, 93% of KOSPI 200 companies have a controlling shareholder, with an average ownership stake of 42%. Given typical shareholder meeting attendance rates, this level of ownership generally provides effective control over board composition. As a result, meaningful hostile takeover attempts have been rare, with examples including Sovereign Asset Management’s engagement with SK Inc. (2003), Carl Icahn’s campaign at KT&G (2006), and KCGI’s involvement with Hanjin KAL (2020).
The article also discusses concerns that introducing poison pills and dual-class shares in a market already characterized by strong controlling shareholders could entrench management and dilute the impact of prior governance reforms. It references the Organisation for Economic Co-operation and Development (OECD) Corporate Governance Principles, which recommend that changes affecting voting rights should receive approval from shareholders negatively impacted by those changes.
SquareWell was quoted as follows: “Investors and proxy advisors generally oppose takeover defense provisions. Even where supported, the purpose is typically to provide the board with time to evaluate alternatives and negotiate outcomes aligned with shareholder interests—not to serve as a permanent entrenchment tool.”
This reflects our view that any consideration of takeover defenses should be proportionate, transparent, and aligned with shareholder rights and long-term value creation.
You can access the full article here (in Korean).
