Samsung Electronics’ Seocho building in Seoul (Image courtesy of Yonhap)
SEOUL, Mar. 4 (Korea Bizwire) – As the global economy faces prolonged downturns and increasing uncertainties, several South Korean conglomerates have initiated cost-cutting measures by reducing the compensation limits for their board members.
According to filings with the Financial Supervisory Service’s Electronic Disclosure System, Samsung Electronics is set to propose a reduction in the total compensation limit for its directors from last year’s 48 billion won to 43 billion won at its upcoming annual shareholder meeting.
Samsung Electronics had previously reduced its directors’ total compensation limit from 55 billion won in 2020 to 41 billion won in both 2021 and 2022, before increasing it to 48 billion won in 2023.
The actual compensation paid to directors also fluctuated accordingly, decreasing from 33.7 billion won in 2020 to 22.5 billion won in 2022, and then rising to 26 billion won in 2023.
In the LG Group, key affiliates are reducing their directors’ compensation limits. LG Corp will bring a proposal to its annual shareholder meeting on March 27 to reduce the total compensation limit from 18 billion won last year to 17 billion won this year, with the number of directors remaining at seven.
The company cited factors such as the year-over-year decrease in consolidated profits, the linkage between management performance and compensation, the slowing global economic recovery, and shareholder feedback as considerations for the adjustment.
LG Twin Towers in Yeouido, Seoul (Image courtesy of Yonhap)
LG Corp’s actual director compensation for last year was 13.4 billion won, an 8% decrease from the prior year’s 14.6 billion won.
SK Telecom is lowering its total compensation limit from 12 billion won to 10 billion won despite an increase in the number of directors from eight to nine. SK Square is reducing both its number of directors from seven to five and its compensation limit from 12 billion won to 10 billion won.
HD Hyundai, maintaining its five directors including Chairman Kwon Oh-gap and Vice Chairman Chung Ki-sun, is decreasing its total compensation limit from 3.4 billion won to 2.7 billion won.
NCSoft is undertaking its first-ever cut in director compensation limits in response to performance declines and a push for operational efficiency, reducing the total from 20 billion won to 15 billion won while keeping the number of directors, including CEO Kim Taek-jin, at seven.
M. H. Lee (mhlee@koreabizwire.com)
