Disappointing Salary Increase Rate Amid Chemical Crisis
"Employees Find Out About Raises Through Paychecks"?Lack of Communication Criticized
Despite strong performance last year, it has been confirmed that Hyosung Group's salary increase rate for employees in 2025 has been set at only 2%. Internally, there is disappointment regarding the unilateral decision-making and notification process.
According to industry sources on April 27, the HR, accounting, and finance teams at Hyosung Group recently finalized the 2025 salary increase rate for employees at 2%. As Hyosung Group does not have a white-collar labor union, the determined salary increase rate is not officially announced; employees only learn of the increase when they receive their paychecks in the month the adjustment is applied. An employee at one of Hyosung's affiliates commented, "Most people probably won't realize the increase until they actually see their paycheck."
Most internal assessments indicate that the salary increase rate fell short of expectations, especially considering Hyosung Group's strong performance last year. On a consolidated basis, Hyosung posted 2.2728 trillion won in sales and 221.1 billion won in operating profit last year, representing year-on-year increases of 23.0% and 283.5%, respectively. Hyosung TNC, the group’s top affiliate by sales, achieved 7.7761 trillion won in sales and 270.7 billion won in operating profit in 2024, while Hyosung Heavy Industries posted 4.895 trillion won in sales and 362.5 billion won in operating profit, showing a steep improvement in performance.
Notably, Chairman Cho Hyunjun of Hyosung Group received a total annual salary of 9.183 billion won last year, including a performance bonus of 3.383 billion won. At the time, the company explained the calculation criteria by stating, "In a fiercely competitive business environment, we are strengthening the stability of existing businesses and leading the group’s business growth through portfolio restructuring and securing new growth engines."
Another affiliate employee remarked, "Chairman Cho emphasizes 'communication' in corporate culture, but when it comes to employee salaries, I feel there is a lack of communication." Lee Sungpil, a certified labor attorney at Ba-U Labor Law Firm, pointed out, "While the salary increase rate is indeed part of management rights, in practice, it is important to clearly share the performance and compensation system with employees to motivate them."
Internally at Hyosung, this year's fixed salary increase rate of 2% is referred to as the "X-value." Depending on individual performance ratings, which are divided into grades from A to E, the increase rate may be frozen or differentially increased by 2 to 3 percentage points. Due to the impact of COVID-19, Hyosung froze the "X-value" in both 2022 and 2023, and raised it by 5% last year in consideration of those circumstances.
According to the company, this year’s salary increase rate was affected by the poor performance of Hyosung Chemical. At the end of 2024, Hyosung Chemical fell into a capital impairment state, resulting in the suspension of stock trading last month. Although the capital impairment was resolved through gains from the sale of the specialty gas division, trading has not yet resumed. Hyosung Chemical is currently reviewing the sale of its optical film and film divisions. A Hyosung representative stated, "The wage increase rate was determined by considering both inflation and the company's performance," and added, "Since salary adjustments are applied differentially based on individual performance evaluations and promotions, it is difficult to explain the increase rate as a uniform figure."
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