Is the Chairman's Age the Promotion Cutoff? Only 8 Older Vice Presidents Remain (Comprehensive)

55 New Vice Presidents Promoted
Chairman Lee Jae-yong's Over-55s Drop from 32% to 14%

Three 30s Directors... Forty 40s Vice Presidents, Increased by 7 to 17
Vice President Promotions Decreased but Share Doubled to 28.2%

"60-Year Rule Quickly Spread Below Vice President Level"
Extreme Performance Orientation, Atmosphere of Growing Discord

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok]

"It is difficult to become a senior executive if you are older than the chairman."

This is a story that began circulating among Samsung Electronics employees after the relatively young owner, Chairman Lee Jae-yong, has exercised full authority since 2014. An analysis of this year's Samsung Electronics personnel results shows that the proportion of newly appointed senior executives at the vice president level or above who are older than Chairman Lee has significantly decreased. In last year's personnel appointments, 32.4% of newly appointed executives at the vice president level or above were older than Chairman Lee, but this year it dropped to 14.5%. Simply put, more than 85% of this year's new senior executives are younger than the chairman.

According to Samsung Electronics and the Financial Supervisory Service on the 7th, the number of vice president promotions older than Chairman Lee Jae-yong, born on June 23, 1968, and currently 55 years old, sharply declined to about one-third within a year in the 2022 and 2023 regular executive appointments. In the '2022 personnel' implemented on December 9 last year, 22 out of 68 newly promoted vice presidents (32.4%) were born in 1968 or earlier, but in the '2023 personnel' announced the day before, only 8 out of 55 (14.5%) were older. The average age of all vice president promotions also dropped from 52.3 years to 51.4 years, a decrease of 0.9 years.

Conversely, the number of '30s directors' and '40s vice presidents' surged. The number of directors in their 30s decreased by one from 4 to 3, but vice presidents in their 40s increased by 7 from 10 to 17. Even though the total number of vice president promotions decreased by 9 from 68 to 59, the number of vice presidents in their 40s increased. The proportion relative to the total rose about twofold from 14.7% to 28.8%. Samsung Electronics' management is becoming significantly younger.

One notable feature of this personnel appointment is that Samsung's unique '60-year-old rule' has rapidly spread to vice president level and below. Samsung Electronics has traditionally applied the '60-year-old rule' in senior personnel appointments, requiring executives aged 60 or older to step down from frontline roles. This was a strong organizational reform justified by the need for fresh ideas to accelerate cutting-edge technology development and new business restructuring. Industry insiders interpret that the core of next year's personnel appointments is to significantly accelerate this pace.

The problem is that the internal atmosphere is tense. There are criticisms that the tradition of the '60-year-old rule' has spread too quickly to vice president level and below. While it is praised as a 'groundbreaking personnel reform,' it is also true that a considerable sense of deprivation is widespread within the organization. An employee, A, working at Samsung Electronics said, "I am in my late 30s, but I already have to worry about executive promotion. If I cannot become a director rather than a department head in 10 years, I might have to look elsewhere. Leaving earlier than the retirement age (60) is a reality."

Behind the 'New Samsung' personnel policy, which promotes '30s and 40s executives' as a banner, there is a growing gap between 'young blood' and 'perpetual department heads.' Although the personnel appointments were made to create new growth engines through business restructuring centered on semiconductors, bio, and telecommunications, it is said that a shadow of extreme performance-oriented culture is spreading discord among members.

Samsung Electronics recently raised the starting salary for new college graduates in the DS (semiconductor) division to around 53 million KRW, causing wage disparities with other divisions; labor-management wage agreements for this year and last year were only resolved in August, reflecting struggles with 'union management'; and the main memory semiconductor price decline combined with the 'three highs' (interest rates, exchange rates, inflation) has made 'cost reduction' urgent. These factors are also analyzed as contributing to a sense of crisis over excessively rapid performance-oriented culture.

A senior management official in the business sector said, "In an aging society, it has long been the case that large company employees are 'N-jobbers' (holding multiple jobs), so there is a divide between those who want to work 'thin and long' and those aiming for 'executive' positions from the start. While the policy to increase young executives due to industrial restructuring makes sense, if it happens too quickly, it can spread discord among organizational members."

However, there is also a counterargument that the generous treatment of talented technology developers in their 40s to prevent losing them to foreign countries such as China should be appreciated. Kim Hyun-soo, head of the Economic Policy Office at the Korea Chamber of Commerce and Industry, said, "From the perspective of productivity and technology development, Samsung Electronics' decision to place '40s' mainly as technology development vice presidents rather than managerial positions this time is a brilliant operational strategy that deserves recognition."

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