Meet Samsung's 'crown prince'
Jay Lee, Samsung Electronics vice chairman, is seen in this file photo. Photo by Rick Wilking, Reuters
SEOUL - Unassuming, media-shy and, as yet, unproven, Jay Y. Lee is the unofficial heir-apparent to lead Samsung Electronics Co Ltd, as the world's biggest technology group by sales approaches a crossroads after years of explosive growth.
The only son of Samsung's frail 72-year-old chairman Lee Kun-hee, Jay has been groomed for years to take over the sprawling South Korean family-run "chaebol", a conglomerate with interests spanning technology and insurance to shipbuilding and construction. Samsung Group's 2012 revenue of 380 trillion won ($371 billion) was more than a quarter of South Korea's nominal GDP.
The younger Lee, 45, became Samsung's vice chairman in 2012 after a spell as chief operating officer in what appeared to be a well choreographed long-term succession plan. But his father's ill-health - Lee senior was hospitalized for a heart attack at the weekend - has raised concerns over whether Jay is ready to take control.
"(Our) vice chairman is a strategic thinker and is very tenacious," said a senior Samsung executive, who didn't want to be named as he's not authorised to talk to the media. "He's been doing things that senior executives can't easily resolve on their own. For example, he spends a lot of time meeting key clients and then manages to cut a deal that would seem almost impossible."
"We've actually benefited significantly from his deal brokering and strategic decision making. He's been doing far more than what many people outside Samsung might guess. He's been learning for years from the chairman and has already been deeply involved in daily operations."
Fluent in English and Japanese and dubbed the "Crown Prince of Samsung" by local media, Jay Lee has become the public face of Samsung in recent years, at meetings with corporate leaders, and politicians from China and the United States, building relationships for a group which had been regarded as secretive.
When South Korea's president invited Google Inc CEO Larry Page to visit Seoul a year ago, one of the first to meet him was Lee, who flew Page to a display plant south of the Korean capital to show off the latest technology Samsung was working on, including flexible screens that could potentially be fitted to Google Glass wearable devices.
The two firms haven't signed a deal on supplying bendy screens, but have since agreed global patent cross-licensing in a joint attack against Apple Inc - defying speculation of fraying ties as Samsung, the biggest smartphone maker using Google's Android platform, develops its own mobile operating system.
Lee has generally shunned the limelight. He has no official Twitter account and little is known of him outside the company - bar a high-profile divorce in early 2009. He has a degree in East Asian History from Seoul National University, an MBA from Japan's Keio University and a business administration doctorate from Harvard. He joined Samsung Electronics in 1991.
While some critics say Lee doesn't have the experience for the top job, and lacks his father's charisma, insiders say his quiet, urbane manner disguises a steely determination and a tenacity to get things done.
"He was born with a silver spoon. We don't know whether he is capable of running (things) yet as he has no track record," said a senior official at Samsung Electronics, who asked not to be identified.
However, a second Samsung executive who worked closely with Lee said he was "very insightful," was on top of key issues and asked probing questions. "He's very sharp and thinks outside the box," said a third executive at the group founded by Lee's grandfather in 1938.
A fourth executive, who has known Lee since childhood, said he is "very committed to work and a serious businessman."
Other insiders have noted that despite his powerful position, Lee takes time to reply personally to emails and enjoys horse-riding and golf.
Beyond the confines of Samsung's headquarters, investors said Lee would naturally be under pressure to succeed, but this could be an opportune time to hand over power as smartphone growth slows and the group looks to new businesses to drive future growth. Samsung's mobile business is expected to show a first annual profit decline in three years as smartphone sales weaken.
"The new businesses Samsung has been preparing are starting to take shape, and I think they will start showing us something concrete from this year," said Hong Jeong-woong, a fund manager at Alpha Asset Management in Seoul. "It's inevitable he'll feel pressured to prove his abilities to become chairman, so we may see Samsung pick up the pace on pushing new businesses. I think the risk of any management vacuum is small."
Samsung has also been looking at solar and bio healthcare as potential future growth engines, and other senior executives Lee has met include those from global automakers Nissan Motor Co , Volkswagen AG, Toyota Motor Corp and BMW - potentially eyeing opportunities in electric batteries and screens, as well as possibly embedding smartphones into auto navigation systems.
Analysts noted that Samsung has taken recent steps to ease Lee's path to leadership, including the planned listing of Samsung SDS Co, which provides IT services to Samsung Electronics.
Lee junior is one of the main shareholders in Samsung SDS, with a stake of more than 11 percent, and the listing could net him more than $1 billion in cash he can use to buy shares in other Samsung companies or earmark for tax related to inheriting his father's wealth, analysts said.
Forbes last month estimated Jay Lee's fortune at around $5 billion.
"Lee needs to free himself from controversy related to SDS. His stake could lead to negative talk once the company goes public," said Hong at Alpha Asset Management. "SDS could be the part of Samsung that takes the lead on new businesses like the 'Internet of things' or remote medical services."