Most Annual Salary Kings Exercise Stock Purchase Warrants
Disclose Hundreds of Billions Won in Gains as Compensation
[Asia Economy Reporter Hwang Junho] The emergence of a ‘salary king’ earning close to 50 billion KRW has deepened shareholders’ sighs. While the number of individuals receiving salaries exceeding several billion KRW more than doubled compared to last year, shareholders’ relative sense of deprivation has grown even stronger.
Looking at the individual compensation amounts (top 5 individuals earning over 500 million KRW) disclosed in last year’s business reports published on June 1 on the Financial Supervisory Service’s electronic disclosure system, 23 people earned salaries exceeding 10 billion KRW. This is a sharp increase from 11 people last year.
The majority of those who earned hundreds of billions of KRW did so through stock options granted to attract outstanding talent. Kim Jong-heun, co-CEO of Devsisters, took home 48.81 billion KRW, making him the highest-paid individual last year. The company’s games, such as Cookie Run: Kingdom and Cookie Run: OvenBreak, succeeded, causing the stock price to rise more than 70% from the beginning to the end of last year. He exercised stock options during this period. Amid Devsisters’ return to profitability after six years, there are criticisms that the CEO sought short-term capital gains. His salary accounted for 86.28% of the operating profit of 56.65444 billion KRW.
As stock price expectations grew despite ongoing operating losses, some also took home salaries worth hundreds of billions of KRW. In the case of Kakao Pay, CEO Ryu Young-joon exercised stock options just one month after the company’s listing last year, earning 33.7 billion KRW in gains as compensation. Kakao Pay has recorded losses for three consecutive years. Ryu was appointed CEO of Kakao but is currently undergoing retirement procedures amid ‘eat-and-run’ controversies. Cellivery has also recorded losses for five consecutive years since 2016, but Executive Director Choi Young-sil, who resigned in May last year, exercised stock options accumulated over four years since 2016, receiving 23.6 billion KRW. This amount is about 6.6 billion KRW less than the 30.2 billion KRW compensation received this year by Hyundai Motor Group Honorary Chairman Chung Mong-koo, including retirement pay from Hyundai Mobis.
A financial investment industry insider commented, “Exercising stock options ultimately lowers the value of shares and is an act of paying salaries to specific individuals at the expense of ordinary shareholders. While it is understandable that talented individuals increase corporate value, shareholders’ dissatisfaction is growing as compensation exceeds reasonable levels.”
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