Lotte Group’s Leadership Overhaul Amid Financial Struggles

Lotte Group, South Korea’s sixth-largest conglomerate, has undertaken the most extensive leadership shakeup in its history, replacing CEOs at 18 of its 58 subsidiaries. The sweeping changes, announced on November 28, come amid growing concerns about the financial stability of Lotte Chemical, one of its core affiliates. Notably, Shin Yoo-yeol, the eldest son of Chairman Shin Dong-bin, has been elevated to executive vice president of Lotte Corporation.

This major reshuffle reflects Lotte’s response to declining performance across its key businesses. Subsidiaries such as Lotte Holdings, Lotte Chemical, and Lotte Duty-Free have recently implemented emergency management measures following sharp downturns in earnings. Analysts view the leadership overhaul as a decisive restructuring initiative. In a statement, the company indicated that the changes were part of a broader effort to overhaul its management framework and accelerate its reorganization.

Over the past three years, Lotte Group has progressively intensified its leadership changes, replacing 12 CEOs in 2022, 14 in 2023, and now 18 in 2024. The latest round primarily targeted its chemical and hotel divisions, which are central to the conglomerate’s operations. As a result, approximately 22% of its executives have exited the company.

Lotte Chemical, in particular, experienced significant turnover, with 10 out of 13 CEOs replaced. Only the leaders of Lotte Aluminum, Lotte Energy Materials, and LC USA, who had assumed their roles last year, retained their positions. Moreover, 30% of the division’s executives departed, including Lee Hun-ki, the head of Lotte Chemical, who resigned after just one year in office. Once a profit engine generating over $720 million in annual operating income from 2015 to 2019, Lotte Chemical has recently been plagued by cumulative losses.

Hotel Lotte, the operator of Lotte Duty-Free and other hospitality ventures, also underwent a complete leadership change. New CEOs have been appointed to head all three of its main divisions—Lotte Duty-Free, Lotte Hotels, and Lotte World.

Despite the extensive changes, the group’s four vice chairmen—Lee Dong-woo of Lotte Holdings, Kim Sang-hyun of Lotte Distribution, Park Hyun-chul of Lotte E&C, and Lee Young-gu of Lotte Foods—have retained their positions, providing some continuity in the upper echelons of management.

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