Angry Kakao Pay Employees: "See You at the Wage Negotiations"

Union Membership Increases After 'Meoktwi Controversy'
Conflict Expected in This Month's First Wage and Working Conditions Negotiation

[Asia Economy Reporter Kiho Sung] Ryu Young-jun, CEO of Kakao Pay who was nominated as co-CEO of Kakao, has finally expressed his intention to voluntarily resign amid the ‘meoktwi controversy,’ and internal turmoil is expected to continue. This is because the Kakao Pay labor union, which is negotiating wages and collective agreements for the first time this year, has stated that it will raise its voice for improving employee treatment in response to this incident. In particular, conflicts are expected to be difficult to resolve as the stock option exercise by Kakao Pay management lowered the stock valuation amount for employees by about 400 million KRW per person.

According to the financial sector on the 11th, Kakao Pay is expected to enter wage and collective bargaining negotiations this month. Kakao Pay employees belong to the Kakao industry-wide union called ‘Crew Union.’ Although the union had not participated in wage and collective bargaining negotiations until now, the number of Kakao Pay union members has increased due to the recent exercise of stock options by management, leading to negotiations. A union official explained, "This is the first negotiation," adding, "The abolition of the comprehensive wage system and the introduction of a flexible working system are among the main demands of the negotiations."

The Kakao Pay wage and collective bargaining negotiations are expected to be fiercely contested as employees’ sense of deprivation worsens due to management risks. Kakao Pay allocated 3.4 million shares, which is 20% of the 17 million shares offered in the IPO, to our union. Employees were allocated an average of 4,005 shares per person.

Kakao Pay’s stock price reached its highest point of 248,500 KRW on December 3, just one month after its listing on November 3 last year. Based on the highest price, the valuation per employee, including initial investment, approached about 1 billion KRW. However, after management exercised a large number of stock options on December 10, the stock price began to plummet. The market capitalization decreased by 32.1716 trillion KRW from the peak of 75.2461 trillion KRW to 43.0745 trillion KRW. Kakao Pay closed at 148,500 KRW the previous day, down 37.7% from the peak. The valuation per employee based on the highest price also dropped by about 400 million KRW. Even considering that employee stock ownership can be sold one year after listing, a drop of about 400 million KRW per person is difficult to accept.

The relatively poor working conditions at Kakao Pay also contribute to employee dissatisfaction. According to the ‘Detailed Results of Kakao’s Spot Labor Inspection’ released last year by Justice Party lawmaker Ryu Ho-jeong, Kakao was ordered to take corrective action for failing to pay more than 120 million KRW in wages to employees and violating the 52-hour workweek system. The problem is that subsidiaries have even worse working conditions than Kakao, and Kakao Pay was identified as a target. At that time, lawmaker Ryu pointed out, "There are subsidiaries with worse labor environments," adding, "Kakao Pay maintains a comprehensive wage system and does not operate a flexible working system, making it a workplace frequently violating the labor hour limit system."

For this reason, there is a prospect that employees may raise stronger voices than expected in this wage and collective bargaining negotiation. A financial sector official said, "Kakao Pay employees have been focused solely on the goal of going public," adding, "However, with the union’s collective backlash leading to the resignation of the nominated Kakao co-CEO and the employees’ voices growing louder, difficulties are expected during the wage and collective bargaining process."

This content was produced with the assistance of AI translation services.