[Exclusive] "No More First-Class Business Trips"... LS Group Issues Golf Ban

"Executives Prefer Business Class, Officers Economy" Recommendation
Tension Builds in Business Circles
No Exceptions for High-Performing Companies... Cost Reduction Concerns

The 'emergency management' triggered by Samsung and SK is showing signs of spreading throughout the business community. The intention is to instill tension within organizations and reduce unnecessary costs, and recently, even companies with strong performance have begun to join the cost-cutting movement.

According to the business community on the 14th, LS Group recently recommended its affiliates, under the name of the holding company, to downgrade the class of airline seats for overseas business trips. Presidents and above are advised to downgrade from first class to business class, and executives from business class to economy class. A senior LS official said, "There are many cases where there is no first class on business trips to neighboring countries such as Japan and Vietnam, and it is often not used. We recommended that presidents take business class rather than first class."

Some LS affiliates have also issued a golf ban. LS Electric is reported to have recently revoked golf memberships from some executives. The purpose is strongly cost reduction.

LS Electric's belt-tightening is considered unusual given its recent performance. This company, which manufactures transformers, is enjoying a boom due to the surge in electricity demand driven by the recent artificial intelligence (AI) craze. Its sales in the first quarter of this year reached 1.0386 trillion won, with an operating profit of 93.7 billion won. Compared to the same period last year, sales increased by 6% and operating profit by 15%. It has already secured orders through 2027. A group official said in this regard, "There was a suggestion that each affiliate should autonomously consider what measures they can take to reduce costs."

LS also considered a six-day workweek for executives, similar to Samsung. However, this was not pursued further due to opposition in internal meetings.

POSCO recently decided to abolish the stock grant (stock compensation system) for executives. This is in line with Chairman Jang In-hwa of POSCO Group expressing his intention to strengthen the responsibility of management and reduce excessive incentives after taking office.