Concentrated Benefits for Some Minority Executives
No Clear Criteria for Differential Distribution Among Employees... Growing Suspicion
K Bank: "Focus on Motivation Over Performance Rewards... Will Expand Compensation Plans in the Future"
[Asia Economy Reporter Kim Jin-ho] K-Bank, the first internet-only bank, is embroiled in internal conflict over stock options. The stock options, intended to boost employee morale and motivation, have instead sparked a controversy over fairness among employees. The issue arose because benefits were concentrated on a small number of executives rather than the employees who endured difficult times since the bank's launch.
According to financial industry sources on the 29th, there are complaints within K-Bank regarding the large-scale granting of stock options. The "carrot" designed to motivate employees and foster a sense of community is instead causing feelings of deprivation among some staff.
An anonymous K-Bank employee said, "I feel disappointed and deprived that benefits are concentrated on executives who have just joined, not on employees who endured tough times," adding, "The company explains that stock options were distributed evenly, but in reality, they were allocated unevenly, and no clear criteria have been disclosed."
Earlier, on the 9th, K-Bank held a board meeting and decided to grant stock options of 2.1 million common shares (exercise price 6,500 KRW) to 320 employees. Stock options are a form of performance reward. They grant the right to purchase shares at a predetermined price, allowing holders to profit if the company's stock price rises above that price after a certain period.
Internal employees pointed out that most stock options were concentrated among a very small number of executives. Rather than employees who endured difficult times, a few newly joined executives received an excessive share of the benefits. Of the 2.1 million stock options, 850,000 shares were granted to nine executives, including Director Lee Poong-woo. Most of these nine executives have been in their positions for less than six months.
There is also much discussion internally about the 1.25 million stock options granted to the remaining 311 employees. If distributed evenly, each person should receive 4,000 shares, but many employees report receiving only 1,000 to 1,500 shares, far below that amount.
Some even suspect that the employee portion of stock options was concentrated on specific individuals. An insider said, "To obtain consent for the stock options, executives are conducting one-on-one interviews with employees to get their signatures," adding, "Questions about allocation criteria are being blocked, and an atmosphere is being created where employees cannot refuse consent."
The stock option allocation plan of the soon-to-launch Toss Bank is also a factor contributing to K-Bank employees' feelings of deprivation. Toss Bank plans to grant stock options worth 100 million KRW to all employees at the time of granting after starting operations to secure top talent. KakaoBank has also granted stock options several times to boost employee morale.
Regarding this, K-Bank stated, "This stock option grant focused more on motivation than on past performance rewards," and added, "We will establish a performance reward system including stock options so that as many employees as possible can benefit in the future."
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