Caregen CEO Jeong Yongji, Who Secured Generous Bonuses and Dividends... Employee Salaries Raised by a 'Peanut' Amount

[Asia Economy Reporter Jang Hyowon] It has been confirmed that CEO Jeong Yongji of Caregen has received a large amount of compensation and dividends exceeding 20 billion KRW since last year. On the other hand, employees' salaries were found to be disproportionately low compared to the increase rates of CEO Jeong's compensation and dividends.

Jung Yongji, CEO of Caregen.

According to the Financial Supervisory Service's electronic disclosure on the 22nd, CEO Jeong Yongji of Caregen received 1 billion KRW in compensation from the company last year. This represents an increase of more than 49% compared to the 670 million KRW compensation in 2018. Vice President Kim Eunmi also received a salary exceeding 200 million KRW, recording a wage increase rate of 26.8% compared to the previous year.

Their compensation is estimated to have increased by an average of more than 47% in the first quarter of this year compared to the same period last year. Unlike last year, individual compensation details of CEO Jeong and Vice President Kim were not disclosed this year.

On the other hand, the average salary per employee last year was around 40 million KRW, which only increased by 14% compared to the previous year. In the first quarter of this year, it rose by 2.4% compared to the same period last year.

CEO Jeong and Vice President Kim also received large dividends. Caregen paid out 27.9 billion KRW in cash dividends last year, an increase of 356% compared to the previous year. Among this, the dividends received by CEO Jeong, his children, and Vice President Kim amounted to 19.2 billion KRW. CEO Jeong holds a 63.5% stake in Caregen. Vice President Kim also holds a 0.3% stake, and his two children each hold 0.05% stakes.

Excluding treasury shares, they took more than 70% of the total dividends. Meanwhile, Caregen's employee stock ownership association holds only 0.09% of the shares, resulting in an average dividend of 150,000 KRW per employee.

CEO Jeong and Vice President Kim continue to receive high dividends this year as well. Caregen decided on a cash dividend of 700 KRW per share on the 7th. The total dividend amount is 6.8 billion KRW, which corresponds to 95.8% of the net profit for the first quarter of this year. This means that the company has left almost no retained earnings for future reinvestment or other uses.

Caregen has sharply increased the salaries and dividends of CEO Jeong and Vice President Kim since last year. Last year was the period when Caregen received a disclaimer of opinion from auditors and its stock trading was suspended.

Samjong Accounting Corporation issued a 'disclaimer of opinion' on Caregen's 2018 financial statements early last year. The reason was the inability to verify the appropriateness of sales, cost of sales, accounts receivable, and inventory. After revising and reauditing four years' worth of financial statements, the company received an 'unqualified' opinion and stock trading resumed on April 27.

A Caregen official stated, "The company recorded its highest performance even during the reauditing process, and compensation was paid according to the contribution to this. CEO Jeong also serves as the Chief Technology Officer (CTO), and Vice President Kim, as the deputy director of the central research institute, made significant contributions to the performance, which is why they were paid high compensation."