The Political Entry of the Salary King... Kodongjin Who Received 28.1 Billion Won from Samsung [Business & Issues]

⑦The Highest Paid from Businessman to Politician
The Value of Samsung Electronics and Hyundai Motor Alumni Godongjin and Gongyeongun

Ahead of the April 10 general election, the ruling and opposition parties have recruited Ko Dong-jin, former president of Samsung Electronics, and Gong Young-woon, former president of Hyundai Motor Company, who are among the business world's top 'salary kings,' earning tens of billions of won annually. The average monthly salary for members of the National Assembly, funded by taxpayers, is about 12.85 million won, totaling approximately 155 million won annually, which is similar to the average annual salary of a regular Samsung Electronics employee (135 million won). The political sphere aims to leverage the recruitment of these top earners to enhance industrial and corporate policies and strengthen public-private cooperation, thereby creating a synergistic effect to revitalize the economy.

[Image source=Yonhap News]

Ko Dong-jin received 28.1 billion won from Samsung Electronics over 5 years

Ko Dong-jin, who joined the People Power Party, is a representative 'salary king' executive at Samsung Electronics, having received tens of billions of won annually in salary and bonuses, recognized for the success of the Galaxy series. The disclosed compensation details in the business reports cover the five years from 2018 to 2022, during which he served as a registered executive director (President and CEO). The total compensation amounted to approximately 28.1 billion won. The launch of 5G smartphones and the success of the Galaxy series were fully reflected in his performance-based compensation.

Ko received an annual salary of 1.17 billion won as president. In addition, bonuses based on work performance were paid at 3 to 5 times the fixed annual salary. Other labor income, including welfare benefits, amounted to about 100 million won annually. The year he earned the most was 2021. Ko received a total compensation of 11.84 billion won in 2021, the highest among Samsung Electronics executives. At that time, his salary was 1.17 billion won, bonuses 4.05 billion won, welfare income 190 million won, and retirement pay 6.44 billion won, nearly double the 6.712 billion won he received in 2020. The retirement pay was calculated based on the executive retirement pay regulations (board resolution), multiplying the retirement base salary of 98 million won by the executive's 20 years of service and a payment multiplier (1 to 3.5).

Even after retirement, Ko continued to receive salary and bonuses. As an advisor after retirement, he received a total of 3.689 billion won in 2022. According to executive treatment regulations, he received a monthly salary of 78 million won from January to December, totaling 936 million won, plus bonuses of 2.659 billion won and other welfare benefits amounting to 94 million won. Considering that the biggest benefit for retired Samsung Electronics executives is the 'bonus' they can receive for up to three years after retirement, Ko can receive bonuses from Samsung Electronics even while serving in the National Assembly.

Samsung Electronics has operated a long-term performance-based compensation system for executives since 2011. Payments are made in installments every three years, with the performance from 2020 to 2022 paid in installments over 2023 to 2025 at certain percentages. Typically, 50% of the total incentive is paid in the first year of the three-year cycle, and 25% each in the second and third years. However, due to poor performance last year, Samsung Electronics adjusted the first-year installment rate from the usual 50% to 33%.

[Image source=Yonhap News]

Gong Young-woon received a total of 5.558 billion won from Hyundai Motor in 2022

Gong Young-woon, former president of Hyundai Motor Company, received 5.558 billion won from Hyundai Motor in 2022. This amount includes a base salary of 981 million won, bonuses of 485 million won, and other labor income of 94 million won. The largest portion of the 5.558 billion won was retirement pay. Gong retired on November 30, 2022, and received retirement income of 3.998 billion won.

Hyundai Motor calculates retirement pay by multiplying the average wage by years of service and position-based payment rates. The average wage applied to Gong was 80 million won per month, with 17 years of executive service. The salary structure at Hyundai Motor shows a higher increase rate for executives. In 2017, executive salaries were about 9.2 times those of employees, increasing to 11.6 times by 2022.

Gong, a former reporter for Munhwa Ilbo, joined Hyundai Motor in 2005 as a director-level executive. At Hyundai, he served as head of the Strategy Development Team, head of the Overseas Policy Team, head of Public Relations (Vice President), and president in charge of strategic planning. After retiring in 2022, he worked as an advisor last year. Like Ko, Gong receives additional monthly salary for 2 to 3 years in an advisory or consulting role after retiring as a senior executive (senior vice president level or above) according to internal systems. The compensation for advisory roles is known to be about 70% of the annual salary. However, due to the high salary, the taxes paid are also substantial, with 45% income tax and 4.5% local tax, meaning nearly half of the income is paid in taxes.

[Image source=Yonhap News]

Top earners in the business world, tasks for the political sphere

In the political and business circles, there is great expectation that the political sphere, having successfully recruited former presidents of Samsung Electronics and Hyundai Motor?two pillars supporting the Korean economy in the semiconductor and automobile industries?will actively utilize their capabilities to complement industrial policies.

Among the 17 standing committees of the National Assembly, excluding the Budget and Accounts Special Committee, most deal with legislation related to private economic activities, except for the Operations Committee, Intelligence Committee, and Gender Equality and Family Committee. However, there are few members of the National Assembly with a corporate background knowledgeable about the economy or industry. The number barely exceeds ten, including Yang Hyang-ja, a former Samsung Electronics employee and member of the Korea Hope Party, Ahn Cheol-soo, founder of AhnLab and member of the People Power Party, as well as Democratic Party members Yoon Young-chan, Lee Yong-woo, and Hong Sung-kook. With President Yoon Seok-yeol strongly initiating efforts to boost the economy through public-private cooperation with a pro-business approach, timely industrial and corporate policies to actively support this are urgently needed.

Ko, who joined the People Power Party, stated at the welcoming ceremony, "My first agenda is the future of youth, the second is strengthening the competitiveness of small and medium-sized enterprises, the third is enhancing the competitiveness of the software industry and nurturing talent, and the fourth is more active consideration for socially vulnerable and marginalized groups," expressing his intention to actively utilize his corporate expertise in politics. Gong, recruited by the Democratic Party, also expressed, "If Democratic Party members focus social energy on innovative growth, it will have great historical significance," and stated his ambition to "put all efforts into building an innovation growth ecosystem by dressing existing industries in innovation and finding breakthroughs in new technologies that change the competitive landscape."