Early Retirement Accelerated Amid Crisis Management and Generational Change
Possessing Expertise and Deep Knowledge of Group Secrets
Appointed as Advisors and Consultants with 1-2 Years of Post-Retirement Management
[Asia Economy Reporters Hyungil Oh, Yeju Han] Executives are often said to be a shortened term for temporary staff. At the end of the year, numerous executives are appointed. Conversely, the same number of executives leave their positions. However, large companies show a certain level of respect to executives who have dedicated themselves to the company. Retired executives are appointed as advisors or consultants for one to two years. We looked into how major companies treat their advisors.
Samsung Group treats retired executives according to their rank at retirement. Those at the president level or above are appointed as advisors for one to two years, while those at the vice president level or below are appointed as consultants. Salaries can be up to 70% of their active-duty pay. Top-level full-time advisors are also provided with offices and vehicles.
There are also gatherings for advisors and consultants. Various retired executive groups are operated, including the president’s gathering called Seongdaehoe and the executive gathering called Seongwoohoe. Occasionally, current executives host events such as golf tournaments for these groups.
Advisors and consultants possess not only expertise in their respective fields but also information related to corporate secrets and the group’s head, as they handled key management issues. Therefore, post-retirement management of executives cannot be neglected. Retired executives sometimes file lawsuits against the company demanding payment of salaries or retirement benefits. Recently, a Samsung Electronics executive who managed patents filed a lawsuit against the company after leaving.
Additionally, Samsung Electronics expanded its Career Consulting Center in 2011 to assist employees with reemployment or entrepreneurship after retirement. The Career Consulting Centers operate in Seoul, Suwon, and Giheung.
SK Group generally honors retired executives as ‘committee members’ for one to two years. Although non-executive, they are provided with office space within the company, vehicles, and drivers. Vehicles are either the same as those used before retirement or one grade lower. Salaries vary by rank and individual but are similar to those during their executive tenure. However, there are no performance bonuses (incentives).
SK also created the ‘Honors Lounge,’ an exclusive space for retired executives, offering office space, psychological, lifestyle, and career counseling, as well as support for job changes and entrepreneurship. The Honors Lounges are located in Seorindong and Samseongdong. This space was established to encourage new challenges in life as the retirement age for executives has been getting younger.
SK explained, "In the past, retired executives enjoyed various benefits provided by the company and planned their second act in life, but recently, as the retirement age has lowered, more are considering reemployment. We support them to effectively utilize their personal networks and know-how."
Hyundai Motor Group grants the title of ‘consultant’ to executives retiring at the senior managing director level and above, and ‘advisor’ to those at the president level and above. There is no fixed salary, but they receive somewhat less than their base pay during active service. Only a few full-time advisors receive office space or vehicles, but most do not receive such support.
LG Group pays retired executives at the president level or above a salary as advisors for up to three years. They are provided with private offices, secretaries, and vehicles. Executives retiring as vice presidents, senior managing directors, or managing directors are appointed as consultants and use shared office spaces. Since 1992, LG has operated the ‘LG Club’ to honor retired executives. This club allows retired executives to meet voluntarily, plan new businesses, or prepare for career changes.
Lotte Group and POSCO Group also appoint retired executives as advisors or consultants, paying them 40-60% of their active-duty salaries. Particularly, retired POSCO executives run their own group called ‘Jungwoohoe,’ which is known to have indirectly influenced past chairman appointments and partner company selections.
Executives who first take on advisor or consultant roles often express feelings of helplessness. However, over time, they come to see this period as a time to heal their tired bodies and minds while receiving a salary comparable to their executive days without the burden of work.
A representative from a major corporation said, "Nowadays, many people become executives at relatively young ages, so many seek reemployment after retirement. Quite a few see the advisor position as a stepping stone for their next career move." They added, "Some say it’s better than when they were active executives because they get paid while resting."
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