[At a Crossroads]② Glovon, Owner Receives Tens of Billions in Salary and Rent Amid Consecutive Losses

Glovon building located in Sinsa-dong, Gangnam-gu, Seoul.
Photo by Jang Hyowon

[Asia Economy Reporter Jang Hyowon] It has been revealed that Globon, a KOSDAQ-listed company, paid tens of billions of won in annual salary to CEO Han Sang-ho despite continuing losses for several years. Additionally, CEO Han purchased a building using lease deposits from Globon without spending a single won of his own money, earning high monthly rent annually and enjoying capital gains.

According to the Financial Supervisory Service's electronic disclosure on the 16th, Globon paid CEO Han 910 million won in salary up to the third quarter of this year. The base salary was set at 1.2 billion won per year, meaning he received 100 million won per month. 10 million won was a bonus.

CEO Han became the largest shareholder of Globon in November 2015 and took over management rights. Since then, he has received tens of billions of won in annual salary. In 2016, he accrued a base salary of 900 million won and a retirement allowance of 500 million won. In 2017, he received a total compensation of 1.8 billion won, including a salary of 1.236 billion won and a retirement allowance of 569 million won. In 2018 and 2019, the amounts were not disclosed as they were below 500 million won, but in 2020 he received 600 million won again, and in 2021, a salary of 1.2 billion won.

CEO Han’s annual salary level is higher than that of the CEOs of Cosmax and Korea Kolmar, whose sales are 300 times larger than Globon’s. Cosmax Chairman Lee Kyung-soo received 730 million won in salary last year. Korea Kolmar Vice Chairman Yoon Sang-hyun’s salary was also 1 billion won. Last year, Cosmax and Korea Kolmar recorded sales of 1.5915 trillion won and 1.5863 trillion won, respectively. Globon’s sales last year were 5.2 billion won.

Despite receiving a high salary, Globon has been struggling in the red. In 2016, the first year after CEO Han took over, Globon recorded sales of 15 billion won and an operating loss of 5.8 billion won. In 2017, sales halved and operating losses expanded to 6.9 billion won. The company briefly turned a profit in 2018 but has been in the red continuously since 2019. Up to the third quarter of this year, it recorded a cumulative operating loss of 3 billion won.

CEO Han not only received a salary but also acquired a building using company funds, earning monthly rent and capital gains. After acquiring Globon, in July 2016, he purchased a six-story above ground and two-story underground building in Sinsa-dong, Gangnam-gu, Seoul, under his name for 35 billion won.

The acquisition funds were prepared with a 20 billion won loan and 15 billion won in lease deposits received from Globon. At that time, Globon’s total assets were 32.7 billion won. About half of the assets were spent on lease deposits.

A real estate official said, “For offices in Gangnam, the deposit is usually set at about 10 times the monthly rent,” adding, “Considering location and size, the market value of the lease deposit compared to surrounding buildings is estimated to be around 1.2 billion to 2.2 billion won.”

Additionally, CEO Han received 960 million won annually in rent from Globon. Including rent and management fees, Globon paid over 1 billion won to CEO Han. Ultimately, CEO Han purchased his building without capital by using company money, earning rental income and capital gains from the building’s market value.

A Globon official explained, “CEO Han Sang-ho works a lot, so his salary was set accordingly,” and added, “The rent is considered appropriate because the current market price has risen significantly.”