"Even if you don't know Kakao, Hive is a no-go"…Reasoned Opposition from SM Employees

HYBE's Average Salary 15 Million KRW Higher Than SM's
Differences Also in Employee Welfare and Commute Culture
SM Employees "Fear Losing Our Unique Identity"
Anger Toward Former Chief Lee Soo-man Also Plays a Role

[Asia Economy Reporter Seungjin Lee] Following the executives of SM Entertainment (hereafter SM), regular employees have also publicly opposed the acquisition by HYBE. HYBE offers higher salaries and better welfare compared to SM. Nevertheless, the stance is that SM’s unique identity cannot be taken away by HYBE.

Average Salary: HYBE 75 million KRW vs SM 59.4 million KRW

HYBE boasts the highest salary level among domestic entertainment agencies. As of September last year, HYBE had a total of 592 employees, with an average salary per person of 75 million KRW. In contrast, SM’s average salary per person was only 59.4 million KRW. This is lower than YG Entertainment and JYP Entertainment, which are also considered the top three in the industry along with SM.

HYBE is also known to have superior welfare benefits. SM does not have an in-house cafeteria and only supports lunch expenses. HYBE operates an in-house cafeteria and supports both lunch and dinner expenses. Additionally, HYBE has a flexible working hours system and an unlimited annual leave policy. Employees can come to work at their preferred time and, if conditions allow, take several weeks off.

Within SM, dissatisfaction with salaries and welfare has been raised for years. Despite being a leading company in the industry, SM’s salary and welfare levels do not match those of its competitors. Considering salary and welfare, HYBE’s acquisition of SM should be welcome news for employees. However, opposition voices among employees are growing.

Anger Toward Lee Soo-man and SM’s Pride Issue

Summarizing the voices of SM’s internal employees, the reasons for opposing HYBE’s acquisition boil down to anger toward former Chief Producer Lee Soo-man and the pride of being a leading entertainment agency.

An employee who has worked at SM for four years described SM as a “large corporation.” He said, “SM employees take pride in the fact that our company represents the industry,” adding, “If HYBE takes over management rights, there is a strong concern that SM’s unique identity will be lost and the position of affiliated artists may be narrowed.”

Such concerns are also reflected in a statement from the “Regular Employees Council,” composed of 208 SM regular employees, issued on the 20th. They stated, “Former Chief Producer Lee Soo-man, when faced with crisis due to his illegal and tax evasion activities, sold his shares to a competitor he had disparaged and fled,” and argued, “SM’s culture cannot be subordinated to HYBE’s capital.”

Former Chief Producer Lee Soo-man (right) and Bang Si-hyuk, Chairman of HYBE.

Why HYBE Is Not Acceptable but Kakao Is

Within SM, there are no voices opposing Kakao’s acquisition, unlike HYBE.

In 2021, SM paid 24 billion KRW to Lee’s personal company, Like Planning. That year, Lee took 35% of SM’s operating profit. Over the past 20 years, SM has paid about 140 billion KRW to Lee’s personal company.

In contrast, Kim Beom-su, founder of Kakao and head of the Future Initiative Center, received about 600 million KRW in compensation in the first half of last year. Converted to an annual salary, it is just over 1.2 billion KRW. Considering Kakao’s market capitalization is ten times that of SM, this level is seen as acceptable compared to Lee. SM employees cite this point to argue that they cannot follow HYBE, which is allied with Lee.

SM employees also positively evaluate Kakao’s strengths as a platform company. The way Kakao has managed after acquiring Starship Entertainment and others has received positive feedback from employees. Kakao currently has about ten entertainment agencies as subsidiaries but does not participate in their management. From SM employees’ perspective, even if Kakao acquires the company, SM’s unique identity can be maintained while creating synergy with other agencies.

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