August KOSPI Listing... 'Expecting Double Jump'
'Should We Sell Employee Shares?' Concerns Over Mass Resignations
High Turnover in Development Department Causes Significant Unrest
[Asia Economy Reporter Kim Jin-ho] Internet-only bank KakaoBank is experiencing internal unrest ahead of its listing on the Korea Exchange. Concerns are rising that the substantial valuation gains from employee stock ownership plans (ESOP) upon listing could lead to a wave of resignations similar to SK Biopharm’s ‘mass resignation.’ It is reported that key personnel, especially IT developers, are significantly unsettled.
According to financial authorities on the 5th, KakaoBank will be listed on the Korea Exchange in August. As the first initial public offering (IPO) case for an internet bank, it is expected to continue the ‘Ttah-sang’ (a phenomenon where the stock price doubles at the opening and hits the upper limit) craze that has been ongoing since last year. If Ttah-sang occurs, KakaoBank’s stock price is expected to reach 101,400 KRW.
If KakaoBank joins the Ttah-sang trend, attention is focused on whether key personnel departures will occur, similar to when SK Biopharm employees consecutively resigned to realize gains. Among KakaoBank employees, there is speculation that the possibility of mass resignations is high due to the significant benefits from the ESOP. An employee who requested anonymity hinted, “There are rumors that quite a few employees will resign.”
KakaoBank’s ESOP allocation amounts to 13.09 million shares, which is 20% of the total public offering shares (65.45 million shares). This is an overwhelming volume compared to previous offerings such as Big Hit (1.426 million shares) and SK Biopharm (2.246931 million shares). Considering that there are about 1,000 employees, the average allocation per person reaches 13,000 shares. This is a simple division of the allocation by the number of employees. Actual allocations are known to vary depending on the employee’s date of joining.
If Ttah-sang is achieved, the estimated valuation gain per person is about 800 million KRW. The ESOP shares are locked for one year after listing, but if an employee resigns, they can realize gains one month later. The higher the stock price rises, the greater the likelihood of employee resignations. SK Biopharm is a case where the stock price rose more than fivefold compared to the offering price, resulting in a large number of resignations.
The area with the greatest unrest is the development sector. Unlike other job groups where frequent job changes are a disadvantage, it is common for developers to move between companies frequently. It is explained that even if they sell their ESOP shares to realize gains and move to a new company, it does not significantly burden their career. An insider familiar with the internal situation said, “As KakaoBank stabilizes, there is a growing atmosphere of employees wanting to challenge themselves for higher achievements.”
In particular, there is strong interest in Toss Bank, which has significantly expanded its development team recruitment ahead of its official launch in September. Toss Bank has announced the recruitment of double-digit experienced IT developers and offered exceptional incentives. These include salaries up to 1.5 times higher than their previous companies, as well as stock options and shining bonuses. Rumors are widespread in the financial sector that a considerable number of KakaoBank employees have applied for Toss Bank’s recruitment recently.
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