Gah Sam-hyun and Han Young-seok 800 Million Won, Kim Hyung-kwan 500 Million Won... Compensation Also Varied Amid Poor Performance
Current Status of CEO Compensation Disclosure in Joseon Company
[Asia Economy Reporter Oh Hyung-gil] Despite the shipbuilding industry recording massive losses due to the surge in raw material prices, the compensation of chief executive officers (CEOs) showed mixed results.
According to the 2021 business reports disclosed by shipbuilding companies on the 20th, Vice Chairman Ga Sam-hyun of Korea Shipbuilding & Offshore Engineering and Vice Chairman Han Young-seok of Hyundai Heavy Industries each received a compensation of 810 million KRW.
The salary was 685.49 million KRW, and the bonus was 115.49 million KRW each.
The company explained regarding the salary, "Until September, a base salary of 33.5 million KRW, corresponding to the president level, was decided, and 20% of this was returned, resulting in a monthly payment of 26.8 million KRW. The position allowance was paid monthly at 28 million KRW. Following the promotion to vice chairman in October, a base salary of 45.5 million KRW, corresponding to the vice chairman level, was decided, and 20% of this was returned, resulting in a monthly payment of 36.4 million KRW."
Both were born in 1957 and share the connection of becoming co-CEOs of Hyundai Heavy Industries in 2018. In March 2020, Vice Chairman Ga moved to Korea Shipbuilding & Offshore Engineering as CEO, while Vice Chairman Han is serving as co-CEO alongside President Lee Sang-gyun.
However, Vice Chairman Ga received 749 million KRW in compensation from Korea Shipbuilding & Offshore Engineering in 2020, which increased by about 52 million KRW last year. On the other hand, Vice Chairman Han received 844.6 million KRW from Hyundai Heavy Industries in 2020, which decreased by about 43 million KRW this year.
This difference appears to have occurred as Vice Chairman Ga moved to Korea Shipbuilding & Offshore Engineering.
Korea Shipbuilding & Offshore Engineering and Hyundai Heavy Industries both recorded operating losses last year, making it imperative to overcome poor performance this year.
Vice Chairman Ga faces the challenge of turning around Korea Shipbuilding & Offshore Engineering, which posted an operating loss of 1.3848 trillion KRW last year. He must overcome the main causes of the loss, including the ruling on ordinary wages and the provision for losses due to the sharp rise in steel prices in the first half of last year.
Vice Chairman Han also urgently needs to improve performance. Hyundai Heavy Industries recorded consolidated sales of 8.3113 trillion KRW and an operating loss of 800.3 billion KRW last year. However, both CEOs are hopeful due to the ongoing boom in orders since last year.
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Meanwhile, Kim Hyung-kwan, CEO of Hyundai Samho Heavy Industries, received 561 million KRW in compensation last year, while Jung Jin-taek, CEO of Samsung Heavy Industries, and Lee Sung-geun, former CEO of Daewoo Shipbuilding & Marine Engineering, were excluded from disclosure as their compensation was below 500 million KRW.
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