775 Shares Granted to 13 Recipients from January Last Year
RSU System Introduced in 2023, First Payment Made in July Last Year
Shares Awarded in Installments After Performance Evaluation for Those Maintaining Contracts
Aimed at Promoting Responsible Management and Enhancing Share Value
Emart, the first among major domestic retail companies to pay executive bonuses in Restricted Stock Units (RSU), granted some company shares to executives, including CEO Han Chaeyang, as a reward for last year's performance. Attention is focused on whether Emart's attempt to strengthen responsible management will have the effect of increasing corporate value.
According to the Financial Supervisory Service's electronic disclosure system on the 10th, Emart acquired 775 treasury shares last month to pay RSUs granted to executives in January last year and distributed them to 13 executives. CEO Han Chaeyang received the largest amount with 100 shares, and four executive directors and eight managing directors were allocated 50 to 75 shares each based on performance. The disposal price per share was 65,900 KRW, totaling approximately 51,072,500 KRW.
Earlier, Emart introduced the RSU system in July 2023 through a board resolution to pay executives rewards for performance in company shares. Those who maintained their executive positions during the grant period were subject to annual performance evaluations and the RSUs were to be paid in two installments.
At the time of the system's introduction, 3,600 shares were planned to be granted to 29 executives eligible for payment, but the number of those who maintained their contracts for one year decreased to 18, so 1,000 shares were granted in July last year, and the remainder is scheduled to be paid to eligible personnel in July this year. CEO Han was included among the recipients in January last year, met the conditions for one year, and became the first recipient this year. Initially, the total number of shares to be granted in January last year was 2,450 to 21 executives, but the number of eligible executives decreased to 13, reducing the first installment as well.
The immediate compensation amount that Emart executives can feel from the introduction of RSUs is not large. When the system was created, Emart's stock price exceeded 110,000 KRW, but it fell to the high 50,000 KRW range at the time of the first payment last year. Considering Emart's current stock price in the 60,000 KRW range, the actual compensation amount for executives who received RSUs last month is about 3 million to 6 million KRW. It is hard to see this as a motivating amount for those earning annual salaries in the hundreds of millions of KRW. For example, CEO Han Chaeyang's annual salary is 463 million KRW in base pay and 135 million KRW in bonuses including performance pay, totaling 598 million KRW.
An Emart official stated, "Rather than a concept of temporary compensation, the RSU payment regulation was established with the intention of encouraging executives to contribute to the company's growth so that they can increase the value of the shares they hold from a long-term perspective and strengthen responsible management."
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