KT&G, previously known as Korea Tobacco & Ginseng and valued at $8.6 billion, is facing pressure from activist investors Flashlight Capital and ANDA Asset Management.

The two investment firms, which are not working together, are both pushing the company to announce bigger dividends and additional share buybacks, spin off the ginseng business, and optimize its balance sheet.

"We do not believe the dissidents have made a sufficiently compelling argument to warrant supporting their platform at this time," Glass Lewis wrote.

Glass Lewis' report contrasts with that of its larger rival, Institutional Shareholder Services (ISS), which urged investors to elect director candidates nominated by the activist investors and support their proposals to return more cash to shareholders.

Glass Lewis recommended that investors back management's proposed dividend payments, calling the higher dividend proposals made by the activists "excessive".

The proxy advisor held two in-person meetings with the company last year but did not meet with the activists, according to the report.

Large investors often follow the recommendations of proxy advisory firms.

First Eagle Investment Management, BlackRock and Vanguard Group rank among KT&G's biggest investors. The company's annual general meeting is scheduled for March 28.

(Reporting by Svea Herbst-Bayliss; Editing by Jan Harvey)