After Cutting Employee Salaries by 2.5 Billion Won Due to Poor Performance... Chairman Kang Sunghee Takes Home Billions in Salary [KOSDAQ in Crisis] Otek ②

Financial Structure Weakens After Three Consecutive Years of Losses
Chairman’s Salary Rises Despite Company’s Worsening Performance

Kang Sunghee, Chairman of Otek, a KOSDAQ-listed company, has been confirmed to have received an annual salary worth billions of won, despite the company continuing to post losses.

According to the Financial Supervisory Service's electronic disclosure system on the 23rd, Chairman Kang received 842 million won in salary from Otek alone last year. Otek stated in its disclosure that the salary was determined by comprehensively considering leadership, expertise, and contributions to the company.

Although Chairman Kang received a substantial salary, Otek recorded a significant loss last year. In 2024, Otek posted consolidated sales of 909.2 billion won and an operating loss of 14.9 billion won. Sales decreased by about 5%, and the operating loss expanded by more than 52% compared to the previous year. The net loss for the year was also substantial, at 31.7 billion won. As a result, total equity decreased, causing the debt ratio to soar to 323%.

Chairman Kang's high salary began in earnest in 2020. That year, he received 1.65 billion won in salary from Otek. Considering that there was no disclosure in 2019, it is estimated that his salary was less than 500 million won that year, meaning he increased his salary by at least three times.

However, Otek's performance had already started to decline at that time. In 2020, Otek recorded consolidated sales of 925.7 billion won and operating profit of 9.3 billion won. Compared to 2019, sales decreased by 2.7%, and operating profit dropped by about 70%. This is attributed to the domestic economic downturn caused by the COVID-19 pandemic.

It appears that employee salaries were also reduced amid poor performance. In 2020, Otek spent 50.9 billion won on employee salaries, a decrease of 2.5 billion won from the previous year. While salaries paid to employees were reduced, only Chairman Kang continued to receive a high salary.

After 2020, Otek's performance continued to deteriorate. In 2021, operating profit dropped by 31% year-on-year to 6.4 billion won, and in 2022, the company began posting losses, recording an operating loss of 19.1 billion won. Otek recorded operating losses for three consecutive years. Nevertheless, Chairman Kang continued to receive a high salary. In 2021, he received 802 million won, and in 2022 and 2023, when the company was in the red, he received 962 million won each year.

Not only Chairman Kang but also his two sons receive salaries from Otek. The eldest son, Kang Shinuq, Executive Director of Otek Group's Future Strategy Headquarters, was first listed as a registered executive at Otek in 2017. Considering the total salary paid to registered directors by Otek last year, it is estimated that he received an annual salary in the range of 100 to 200 million won. The second son, Kang Shinhyung, Managing Director of Otek Group's Future Strategy Headquarters, is also analyzed to have received an annual salary in the 100 million won range each year.

The Kang family is affiliated not only with Otek but also with its subsidiaries, so the total amount of salaries received is expected to be higher than what has been disclosed. Chairman Kang serves as CEO of Otek Carrier, CRK, and Otek Otis Parking System, and is also a registered director at the affiliated company FDCIS. Executive Director Kang is CEO of SH Global. Managing Director Kang is a registered director at both FDCIS and SH Global.

Meanwhile, when asked about the reason for the inverse relationship between Otek's performance and Chairman Kang's salary, Otek did not respond.