[Exclusive] Up to 1200%... Why SK Inno's Performance Bonuses Are Causing a Stir

Standard Changed, Subsidiary Gap Up to 0:1200
"Are They Really SK Inno Subsidiary Employees?" Complaints

SK Innovation, which achieved record-breaking performance, is facing unrest over the differentiated performance bonus payments by subsidiaries.

On the 27th, a day before the performance bonus distribution, a representative of the SK Innovation labor union stated, “The Ulsan site receives up to 800% of the base salary as a performance bonus, while SK Enmove and SK Energy’s petroleum refining business division (R&S), subsidiaries in the oil business, receive up to 1200%. SK Geocentric, SK On, and SK IE Technology (SKIET) will receive 0% performance bonuses this year.”

He added, “Furthermore, the bonuses are paid differently on an individual basis, but the calculation method is complicated.” SK Innovation decided this year to pay performance bonuses differently depending on which subsidiary an employee belongs to, rather than based on individual performance as in the past. Company performance and corporate value have become more important than individual achievements.

Last year, SK Energy and SK Enmove posted operating profits exceeding 2 trillion won and 1 trillion won respectively, but SK On recorded a 1 trillion won loss. SK Innovation included ESG goal achievement, linked to corporate value, as a condition for performance bonus payments in addition to financial results.

A portion of the total performance bonus related to ESG goal achievement is accumulated as a mid-term performance bonus and can be received based on the achievement level of goals set every three years.

SK Headquarters, Seorin-dong, Jongno-gu, Seoul [Image source=Yonhap News]

For SK Innovation employees (staff) receiving a 1000% performance bonus this year, up to 600% is paid as an individual performance bonus, and 400% is accumulated. The accumulated 400% will be received later depending on the timing of accumulation and stock price fluctuations three years later.

SK Geocentric also receives performance bonuses based on progress in eco-friendly businesses such as recycled plastics over three years. By applying different calculation methods for each subsidiary, the range of performance bonuses ultimately varied from 0% to 1200% by subsidiary.

On this day, SK Innovation employees who received the performance bonus statements reflecting the new calculation method expressed dissatisfaction through online communities. A post titled “Performance bonuses of 1200:800:0 ? for whom?” was uploaded on the SK Innovation union bulletin board.

Author A said, “Changing just one system turns a 4 trillion won performance into a 1200:800:0 performance bonus distribution. Neither the SK Energy R&S and SK Enmove engineers receiving 1200%, nor the union members receiving 800%, nor the SK Geocentric engineers receiving 0% are happy ? so who is this system for...?”

Many complaints have also been posted on the anonymous workplace community Blind. An SK Innovation employee said, “Previously, bonuses were given on a consolidated basis, so earning 2 trillion won resulted in a 1000% bonus, but now, despite earning 5 trillion won, bonuses range from 0% to 1200%. The refining sector, which achieved the highest performance ever, feels bad due to relatively insufficient bonuses compared to peers, and other subsidiaries receiving 0% have a poor atmosphere.”

Another employee said, “Even though the companies are different, there was pride in ‘SK Innovation is one body,’ but the atmosphere has completely changed due to differentiated performance bonus payments.” SK Innovation explained that it has been preparing a new performance bonus system by subsidiary for two years and has held several explanatory meetings for its members.

An SK Innovation representative said, “As the businesses of subsidiaries such as batteries and materials have diversified, we established a performance bonus system tailored to their characteristics,” adding, “The average performance bonus for all SK Innovation employees is less than 500% of the monthly base salary.”