Cho Jung-ho, chairman of Meritz Financial Group and youngest son of Hanjin Group founder Cho Choong-hoon, has surpassed Samsung Electronics Chairman Lee Jae-yong to become South Korea’s wealthiest stockholder. As of Mar. 6, Cho’s shareholdings were valued at approximately 13.43 trillion won (about $9.2 billion) , exceeding Lee’s holdings by about $184.4 million (2.2%).
Cho owns 51.25% of Meritz Financial Group.Over the past year, Meritz’s stock price surged by 60%, significantly boosting Cho’s assets. In contrast, Lee’s holdings in Samsung Electronics and Samsung C&T Corporation experienced declines of around 25% each during the same period.
In 2002, following the passing of his father, Cho inherited financial affiliates such as insurance and securities companies, while his elder brothers took over other divisions: the eldest, Cho Yang-ho, assumed leadership of Korean Air; the second brother managed Hanjin Heavy Industries; and the third oversaw Hanjin Shipping.
In a 2015 interview with Forbes, Cho noted that after his older brothers took their companies first, he was left with the ‘remaining ones.’ However, after More than 20 years, the landscape has changed—Hanjin Heavy Industries and Hanjin Shipping no longer exist, while Korean Air’s market capitalization is now about one-third that of Meritz Financial.
Meritz Financial’s rapid ascent is reshaping S. Korea’s traditionally dominant financial landscape, long led by KB, Shinhan, Hana, and Woori. Its market capitalization now stands just behind KB Financial Group.
At the end of 2020, Meritz Financial’s market cap was approximately $3.8 billion, less than half of the major financial holding companies. However, by 2023, it surpassed Woori Financial, overtook Hana Financial last year, and this year exceeded Shinhan Financial.
In terms of net income, Meritz is challenging other bank-centric financial groups. Last year, Meritz reported a net income of $1.61 billion, approaching NH NongHyup Financial Group’s $1.69 billion, though still behind KB Financial’s $3.4 billion and Shinhan Financial’s $3.1 trillion.
Industry insiders say Meritz’s rapid growth stems from Cho’s performance-driven management style. The company’s name, “Meritz,” is even said to come from the word “meritocracy.” Unlike many S. Korean firms, where loyalty is highly valued, Meritz prioritizes results. Employees are encouraged to prove their worth through performance, and those who deliver are rewarded with generous financial incentives.
For instance, at Meritz Fire & Marine Insurance, 60% of salaries are performance-based, and it’s not unusual for professional managers like Vice Chairman Kim Yong-beom to earn more than Chairman Cho.
Meritz is also known for its bold decision-making. A notable example is its substantial funding to Lotte Engineering & Construction during the 2022 liquidity crisis triggered by the Lego Land incident, a time when few were willing to lend. A financial authority official noted that the capital market was so tight that regulators had to turn to Meritz, which made a swift lending decision.
This agility comes from Meritz’s streamlined decision-making process, where top executives gather in a single meeting to make investment choices together.
A senior executive at a securities firm commented that such swift decisions might have been hindered during risk assessment at other banks or securities companies. Embracing a high-risk, high-return philosophy, Meritz lent $622.6 million to Lotte at a 12% annual interest rate, earning approximately $69.1 million in just over a year.
Meritz also prioritizes shareholder returns, adhering to the principle that all shares hold equal value, regardless of ownership.
Even before the government launched initiatives to boost corporate value and shareholder returns last year, Meritz had already set a goal of a 50% shareholder return rate to attract investors. In the previous year, it allocated 53% of its net profit to shareholder returns through share buybacks, cancellations, and dividends.
Based on this characteristic Bloomberg reported that Meritz is sometimes compared to Warren Buffett’s Berkshire Hathaway in terms of expanding its insurance business and holding company model, earning it the nickname “Meritz Hathaway.”
Naturally, as the largest shareholder, Chairman Cho is the primary beneficiary of these shareholder returns. For the fiscal year 2023, he received dividends totaling $159.5 million, surpassing Hyundai Motor Group Chairman Chung Eui-sun ($107.1 million), Hotel Shilla President Lee Boo-jin ($92 million), and LG Group Chairman Koo Kwang-mo ($53.8 million).
