GS: 2024 Performance Bonus '0 KRW'... Executive-Employee Salary Gap Reaches 30 Times
Performance 'Deterioration' at Hyundai, Daewoo, and DL; Salaries Rise... Trend Toward 'Organizational Slimming'
In 2024, the wage gap between executives (registered directors) and employees at major construction companies was found to have widened up to 30 times. GS Construction and Daewoo Construction saw an increase in salary disparities, while Hyundai Construction, Samsung C&T, and DL E&C experienced a reduction. Additionally, there was a trend of decreasing non-registered executives due to the downturn in the construction industry.
According to the 2024 business reports disclosed on the Financial Supervisory Service's electronic disclosure system on the 24th, among the top five listed construction companies (based on construction capability evaluation), GS Construction had the largest annual salary gap between executives and employees. The average employee compensation was 93 million KRW, while the average compensation for registered directors was 2.816 billion KRW, resulting in a gap of 30.3 times. In 2023, it was 19.3 times. During the same period, Daewoo Construction's salary gap between registered directors and employees widened from 5.1 times to 5.9 times. On the other hand, Samsung C&T (19.6 times → 10.9 times), Hyundai Construction (11.9 times → 7.9 times), and DL E&C (7.6 times → 5.3 times), which combine four sectors including construction to calculate averages, saw a reduction in the salary gap between executives and employees.
GS, 2024 Performance Bonus '0 KRW'... Executive-Employee Salary Gap 30 Times
Looking at each construction company, the four registered directors of GS Construction received a total of 8.447 billion KRW last year. Advisor Im Byung-yong received a total compensation of 5.08 billion KRW, including a retirement allowance of 4.878 billion KRW. Among the five construction companies, Advisor Im was the 'salary king.' Next, Chairman Heo Chang-soo received 2.551 billion KRW, and CEO Heo Yun-hong received 816 million KRW. GS Construction traditionally has high executive compensation. In 2023, the average compensation for registered directors was 2.01 billion KRW, the highest in the industry. Last year, the average was higher because Advisor Im Byung-yong, known as the industry's 'longest-serving CEO,' received a large retirement allowance, which was included in the registered directors' compensation.
On the other hand, the average employee compensation at GS Construction was 93 million KRW, tied for the lowest among the top five construction companies with DL E&C (average 93 million KRW). This represents a 10.6% decrease compared to 104 million KRW in 2023. A GS Construction official explained, "The reason for the decrease in average employee salary compared to 2023 is that performance bonuses were not paid last year," adding, "The 2023 salary included performance bonuses." Last year, GS Construction returned to profitability with an operating profit of 286.2 billion KRW after two years. GS Construction was the best-performing large construction company compared to 2023. Operating profit is the amount remaining after subtracting selling and administrative expenses from sales, and labor costs are included in these expenses. Efforts to reduce labor costs contributed to the improved performance.
Samsung C&T, which also performed well following GS Construction, had the second-largest executive-employee salary gap at 10.9 times. Employee compensation decreased slightly from an average of 136 million KRW in 2023 to 134 million KRW last year. However, Samsung C&T discloses average employee salaries by combining four sectors: construction, trading, fashion, and resorts. The construction sector likely saw a similar level of decrease.
Performance 'Deterioration' at Hyundai, Daewoo, and DL; Salaries Rise... Trend Toward 'Organizational Slimming'
In contrast, companies with relatively poorer performance compared to the two construction firms saw employee salaries increase. Hyundai Construction, which recorded a deficit for the first time in 23 years, had the highest salary growth rate. Last year, the average employee compensation was 109 million KRW, a 3.8% increase from 105 million KRW in 2023. During the same period, the salary gap between executives and employees decreased from 11.9 times to 7.9 times. DL E&C recorded an average compensation of 93 million KRW, up 3.3%, and Daewoo Construction recorded 101 million KRW, up 1%. Daewoo Construction's operating profit decreased by 39% compared to 2023, and DL E&C's dropped by 18%. Despite the difficult circumstances, they managed to raise salaries slightly.
Meanwhile, except for Samsung C&T, Hyundai Construction, Daewoo Construction, DL E&C, and GS Construction all saw a decrease in the number of non-registered executives compared to 2023. DL E&C's non-registered executives decreased by 15.8%, from 57 in 2023 to 48 in 2024. During the same period, GS Construction decreased from 45 to 40 (-11.1%), Daewoo Construction from 94 to 84 (-10.6%), and Hyundai Construction from 81 to 78 (-3.7%). While retired executives increased at most construction companies, they minimized new executive appointments, reducing the overall number of executives.
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