'Performance Downturn' SK Innovation CEO to Return Up to 30% of Annual Salary

Executives to Start Work at 7 a.m., Emphasis on "Jinaniehaeng"
Park Sangkyu: "Crisis Amid Unfavorable Business Environment"
"Cost Competitiveness Damaged... Need to Restore the 'Survival Equation'"

Park Sangkyu, CEO of SK Innovation, sent a message encouraging employees to "proactively respond to the unfavorable business environment." Despite merging last year with SK E&S, which operates a highly profitable business, SK Innovation experienced a decline in performance across its major business divisions in the first quarter of this year due to sluggish battery business, a downturn in the petrochemical industry, and worsening refining margins.

On May 7, Park sent an email letter to all employees of the affiliates, stating, "With a spirit of self-reliance to protect our own workplace, let us make the SK Innovation group a stronger and better first-class company." He added, "Let us proactively respond to the structurally depressed petrochemical industry, tariff wars, and other unfavorable business conditions, uphold the 'survival equation,' and prepare for the future energy era to make SK Innovation even stronger."

SK Innovation headquarters located in SK Seorin Building, Jongno-gu, Seoul. Photo by Kang Jinhyung

In his email, Park stated, "SK Innovation and its affiliates are currently at the center of a perfect storm, facing a structural downturn in the petrochemical industry, a prolonged electric vehicle chasm (temporary stagnation in demand), intensifying U.S.-China conflict, and tariff wars." He continued, "The sustainability of SK Innovation affiliates is at risk due to these unfavorable business conditions." Park emphasized, "When daily efforts such as improving productivity through innovation in the way we work and minimizing unnecessary costs come together, they can create great strength. Now is a time when we desperately need the courage to act despite knowing the difficulties?in other words, the mindset of 'knowing the difficulty and acting anyway' (Jinaniehaeng)."

He pointed out, "For sustainable survival, the value delivered to customers must be greater than the price they pay, and the cost must be lower than that price. This is the 'survival equation,' but SK Innovation's cost competitiveness has been damaged, making this equation unsustainable." Regarding this, he said, "As a member of the management, I feel a heavy sense of responsibility," and added, "I, along with other leaders, will take on this mission and work to find solutions to restore the survival equation."

The presidents of SK Innovation affiliates are considering voluntarily returning 20% to 30% of their annual salaries as a gesture of leadership. It is also reported that executives' starting work hours have been set at 7 a.m. Lee Seokhee, CEO of SK On, had already announced at his first executive meeting after taking office early last year that he would voluntarily return 20% of his salary until the company turns a profit, and had encouraged executives to start work at 7 a.m.