Conflicts over performance bonuses for union presidents are emerging at various redevelopment sites in the Gangnam area of Seoul. Disputes are intensifying over proposals to pay performance bonuses amounting to several billion won. Union members are demanding that there should be an entity, such as a local government or a government ministry, to mediate these disputes. However, the government maintains that it cannot intervene, stating that the distribution of a union's profits is a private matter.

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According to the redevelopment industry on September 24, the liquidation committee of Gaepo Jugong Complex 2 (Raemian Blestige) has included an agenda item for the upcoming liquidation general meeting on September 29: "Settlement of Redevelopment Project Costs and Approval of Audit (Performance) Bonus." The second agenda item proposes paying 14.5 billion won to union members as liquidation proceeds, and selling one 84-square-meter unit, originally intended for general sale but now canceled, to fund performance bonuses for union executives and staff.

The liquidation committee explained, "Over the past 25 years, through roles such as promotion committee member and chair, union auditor and director, union president, and liquidation committee member and chair, significant contributions have been made to the successful progress of the project, maximizing profits and increasing union members' assets." They added, "Unit 3005 in Building 212, whose contract was canceled due to the buyer's ineligibility, will be sold in accordance with the Ministry of Land, Infrastructure and Transport's recommendations and relevant laws, and the proceeds will be distributed as audit bonuses to liquidation committee executives and staff."

The 84-square-meter unit proposed as a performance bonus for executives, including the liquidation committee chair, currently has a market price between 3.5 and 4 billion won. In response, union members visited Gangnam District Office, arguing that "paying performance bonuses from the proceeds of an apartment sale is excessive," and requested the district office to exercise its supervisory authority.

One union member stated, "They are exploiting union members' desire to quickly complete the liquidation process to satisfy their own greed. They combined agenda items that should be voted on separately, disregarding union members' right to choose. Even considering the project's scale, construction costs, and market price differences, a 4 billion won performance bonus is excessive."

An official from Gangnam District Office said, "The district office has no supervisory authority over how the liquidation committee distributes the remaining funds. However, we have recommended to the liquidator (former union president) that the agenda items be separated." The official added, "The liquidator maintains that the proposal is legitimate, and it is difficult for the district office to judge whether the distribution of assets is right or wrong." However, the official also stated, "We will conduct a legal review to determine whether the canceled unit should be resold or returned to union assets."

Some union members of Raemian One Pentas (formerly Shinbanpo 15th) have also opposed the proposal to pay a performance bonus of 3.8 billion won to the union president. To prevent the large performance bonus from being paid, they have requested the Ministry of Land, Infrastructure and Transport to exercise its supervisory authority and have filed a petition for the matter to be referred to the Seocho District Dispute Mediation Committee. The union has included the proposal to pay a 3.8 billion won performance bonus to the president on the agenda for the general meeting scheduled for September 26.

Union members are opposed to the performance bonus, noting that lawsuits are ongoing, including a 20 billion won damages claim against Daewoo Engineering & Construction following the termination of a construction contract, and a lawsuit to nullify the additional 9.9 billion won payment to Samsung C&T for construction costs. They believe it is premature to pay the union president's performance bonus while additional costs may arise in the future. Union members stated, "We do not yet know how much more the redevelopment project costs will increase, and the so-called 'estimated 580 billion won' in project achievements attributed to the union president has not undergone accounting verification." They also pointed out, "The union president initially stated he would not accept a performance bonus, so this proposal was not included in the management and disposal plan."

In this regard, the Ministry of Land, Infrastructure and Transport responded in July last year that "it would be appropriate for performance bonuses to be calculated and included in the estimated redevelopment project costs in the management and disposal plan, and paid only after revenues and expenditures from the project are roughly finalized and profits can be confirmed." However, the ministry also stated that the issue of performance bonuses for union presidents should fall under the jurisdiction of local governments rather than the central government. A ministry official said, "Remuneration for union executives is to be stipulated in the union's articles of association, so it is difficult for the ministry to interpret these matters," and "even if a petition is filed, it is forwarded to the local government."

In the case of the Seoul Metropolitan Government, regulations prohibit paying union executives any performance bonuses in addition to wages and regular bonuses. However, this is only a recommendation and does not have legal force. Seocho District also maintains that this is not a matter for the dispute mediation committee, and that internal union conflicts should be resolved legally. A Seocho District official stated, "If the proposal is approved at the general meeting, it is difficult for the district office to impose sanctions other than through litigation," adding, "It is hard to dictate whether union assets should or should not be distributed in this way. It is considered a private matter."

Attorney Kim Yerim of Law Firm Simmok said, "The clearest way to resolve matters that require a union general meeting decision is to vote them down at the general meeting. However, administrative authorities have no legal basis to take action beyond administrative guidance." She added, "If there are many union members in favor, it is difficult to raise an issue, but there have been recent cases where proposals to allocate 5 billion or 20 billion won as performance bonuses were voted down."