SEOUL -- Hyundai Motor shareholders overwhelmingly rejected Friday a dividend payment roughly seven times what the automaker proposed, dealing a stinging blow to the American activist fund that put it forward.
Elliott Management, which holds a roughly 3% stake, proposed a dividend of 21,967 won (around $19) per share. This would have cost the automaker about 5.8 trillion won, including preferred stock -- nearly four times its consolidated net profit for 2018. Shareholders instead approved a 3,000 won dividend with nearly 90% of the vote.
The South Korean market widely saw the proposal as coming from an investor that does not plan to hold the stock for the long term.
Elliott's board picks also got the thumbs-down, with shareholders voting for three outside directors nominated by the automaker.
The 2019 shareholders meetings season is drawing attention as activist investors go up against the Hyundai Motor group and the Hanjin group, owner of Korean Air Lines. Hanjin holds its annual meeting next week.
Hyundai Motor's consolidated operating profit fell a sixth straight year in 2018 as it struggled in the top two auto markets of China and the U.S. Apologizing for last year's disappointing results, President Lee Won-hee predicted a tough year for the industry amid the persistence of falling American demand and stalling Chinese and European growth.