SEOUL - Korean Air Lines Co Ltd shareholders rejected an extension for CEO Cho Yang-ho as director in a landmark vote on Wednesday, ending his 27-year tenure on the board of South Korea's biggest carrier and sending its shares higher.
A removal would make him the first founding family member of any South Korean corporate giants to be forced off a board, analysts have said, amid growing shareholder activism in Asia's fourth-biggest economy.
A total of 64.1 per cent of shareholders present at the airline's annual shareholders' meeting voted for the airline's proposal, narrowly falling short of the two-thirds required for approving a three-year extension for Cho on the board.
Shares of Korean Air rose as much as 5.6 per cent on Wednesday morning after news of the vote, while parent Hanjin Kal rallied 9.4 per cent, before trimming earlier gains.
"Today's result is a wake up call that Korean Air family's scandals starting from 'nut rage' have not been forgotten," said Park Ju-gun, head of corporate analysis firm CEO Score.
"Although Cho doesn't seem to lose a lot of his power without a board membership, it hits his image, and his family will behave much more carefully now that he realises there are people checking on him and his management."
Cho's eldest daughter, Heather Cho, made headlines in 2014 when she lost her temper over the way she was served nuts in first class and ordered the Korean Air plane to return to its gate at a New York airport.