Celltrion emerged as the leading company in stock option grants this year. (Image courtesy of Yonhap)
SEOUL, Nov. 30 (Korea Bizwire) – This year, the aggregate value of stock options granted by publicly listed companies in South Korea has dipped to 950 billion won, marking the first time in five years that it has fallen below the 1 trillion won threshold.
The decline in the stock market has been a contributing factor, leading to lower exercise prices for stock options. Additionally, major corporations have scaled back the magnitude of their stock option allocations.
As of November 23, the Corporate Data Research Institute’s CEO Score reported that the total stock option grants of listed companies in Korea stood at 957.3 billion won. This reflects a notable 26 percent decrease from last year’s figure of 1.29 trillion won. Furthermore, compared to the peak of 2.7 trillion won in 2021, this year’s amount has plummeted by 64 percent.
The surge in stock option issuances by listed companies in 2020 (1.4 trillion won) and 2021 (exceeding 2 trillion won) can be attributed to the bullish stock market during those periods. The KOSPI index, which was around 2,000 in 2019, surpassed 3,000 in 2021.
This strong market performance, coupled with intensified competition for top-tier development talent, particularly in IT-related sectors, fueled the increase in both the volume and size of stock option grants.
However, the last two years have witnessed a sluggish stock market, leading companies to utilize stock options less frequently. Consequently, there has been a substantial decline in both the number and magnitude of stock option grants.
The number of listed companies granting stock options has exhibited a declining trend: 336 in 2021, 333 in 2022, and 292 in 2023. Similarly, the number of recipients (including duplicates) has decreased, with 16,227 in 2021, 14,314 in 2022, and 14,474 in the current year.
Celltrion emerged as the leading company in stock option grants this year, having granted options worth 71.1 billion won, following its top position last year with grants of 84.4 billion won. Other notable companies in the top ten include Celltrion Healthcare (59.6 billion won), Kakao (44.4 billion won), ConnectWave (30.7 billion won), CanariaBio (26.3 billion won), Hybe (23.8 billion won), Lunit (18.5 billion won), and Krafton (17.2 billion won).
Pharmaceutical and biotechnology companies (three) and IT-related service companies (six) dominated the “Top 10″ list.
Kakao led in the number of stock options granted to employees this year, with 3,539 recipients. Kakao has consistently granted stock options to a significant number of employees annually, including 2,706 in 2021 and 3,111 last year.
Analyzing the industries, the service sector was the largest beneficiary of stock options, with 76 out of the 292 listed companies that granted options belonging to this sector. Following closely were 70 companies in the pharmaceutical and biotechnology sector, 62 in IT and electronics, and 23 in medical devices.
In terms of the amount granted, the service industry was the biggest beneficiary of stock options, with an aggregate total of 347 billion won, while the pharmaceutical and biotechnology industry followed at 271.5 billion won. Combined, these two industries accounted for two-thirds of the total, reaching 618.5 billion won.
M. H. Lee (mhlee@koreabizwire.com)
