Even if You Quit the Company, You Get a Car and Money... SK Executive's 'Certain Welfare'

The World of SK Executives

SK Group has carried out an executive reshuffle featuring young CEOs in their 50s, marking a generational change for the first time in seven years. Four vice chairmen in their 60s have stepped down. Among them, two resigned despite having two years left in their terms.

On the 7th, Choi Chang-won, SK Discovery Vice Chairman and cousin of Chairman Choi Tae-won, was appointed as the chairman of the SK Supex Council, the group's second-in-command position. Although SK Group has emphasized a board-centered approach, this move demonstrated that the owner's influence remains strong.

CEOs of seven affiliates were replaced, and among them, three newly appointed CEOs completed the group's next-generation CEO development program, ELP (Executive Leader Program). A total of 82 new executives were appointed. The average age of the new executives dropped to 48.5 years from 49 years last year. The youngest executive is Choi Yoon-jung, the eldest daughter of Chairman Choi, who was promoted to head of SK Biopharm's Business Development Division. Born in 1989, she previously served as head of the Strategic Investment Team.

When promoted to an executive position at SK Group, various benefits are provided, including salary increases, vehicle support, generous corporate card limits, and golf club memberships, although these vary somewhat by affiliate.

SKT Tower, Jung-gu, Seoul. Photo by Jinhyung Kang aymsdream@

SK Group executives earn 4 to 6 times more than regular employees. At the holding company SK Inc., the average executive salary was 641 million KRW per person last year (excluding registered executives), which is 5.4 times the average employee salary of 118 million KRW. Among SK Inc.'s 4,586 employees, 90 (1.96%) are executives.

Among major affiliates, the largest salary gap between executives and regular employees is at SK Networks. SK Networks executives earned 413 million KRW, 6.3 times the average employee salary of 65.49 million KRW. Only 12 out of 1,638 SK Networks employees, or 0.7%, are executives.

SK Group executives receive company cars. They can freely choose the car model within a set budget according to their rank. Typically, vice presidents drive Genesis G80 models, while presidents and above drive G90 models. Imported cars such as Mercedes-Benz and BMW are also options. Some executives have declined vehicle support, preferring public transportation.

For overseas business trips, business class airline tickets are provided. There is no upper limit on hotel accommodation expenses. Executive corporate cards have limits set according to each affiliate's budget, but the limits are generous enough to be considered virtually unlimited.

Mobile phone devices and communication expenses are supported equally for executives and employees. The company provides a certain amount, and individuals purchase their devices separately. They can buy any model, including iPhone and Galaxy.

SK Building, Seorin-dong, Jongno-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Executives also receive substantial severance pay. Lee Seok-hee, appointed president of SK On in this SK Group reshuffle and former SK Hynix president, received 4.673 billion KRW in severance pay upon his retirement from SK Hynix last year. In 2019, SK Group simplified executive ranks to 'Vice President - President - Vice Chairman - Chairman' and changed severance pay rates the following year. The severance pay rate for vice presidents is 3, and for presidents, vice chairmen, and chairmen, it is 4.

The severance pay rate indicates how many months' worth of average monthly salary is paid as severance for one year of service. For example, if the severance pay rate is 4, an employee receives four months' salary for one year of service. The total severance pay is calculated by multiplying this by the number of years worked. In other words, vice presidents generally receive three times the usual severance pay, and higher ranks receive four times.

There is a courtesy program for retired executives. Based on their professional expertise and contributions to the company, they are granted the title of 'Advisor' for one to two years and receive a certain level of salary. They may also be provided with a private office and vehicle. In Seoul's Jung-gu Seorin-dong and Gangnam-gu Samseong-dong, there are exclusive spaces called 'Honors Lounge' for retired executives. Retired executives can use these spaces for office work as well as psychological and career counseling, and receive support for job transitions or entrepreneurship.