Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
POSCO in hot seat for granting treasury stocks to top executives
POSCO Center building in Seoul / Courtesy of POSCO Group
By Park Jae-hyuk
By Park Jae-hyuk
POSCO Group is facing a growing backlash over its recent decision to grant treasury stocks collectively worth nearly 10 billion won ($7.6 million) to Chairman Choi Jeong-woo and 27 other executives, according to industry officials Monday.
Unionized workers at POSCO criticized the top executives for raking in money despite worsening profits at the steelmaker and former executives also condemned the stock grant, urging Choi to step down voluntarily.
According to a regulatory filing by POSCO Holdings, the 28 executives received the treasury stocks of the group's holding company on March 31 in compensation for their performance. This came after POSCO Group's executives received hefty bonuses late last year.
In particular, the chairman was given 1,812 treasury stocks worth over 600 million won. He also made an annual salary of 1 billion won last year, in addition to a 1.9 billion won bonus.
POSCO's unionized workers hold a press conference in front of POSCO Center building in Seoul, April 7. Courtesy of POSCO union
On the day POSCO Holdings notified its stock grant on April 7, the company's unionized workers held a press conference in front of the POSCO Center building in Seoul to condemn the decision.
“Due to the flood in our Pohang steel mill, the company's operating profit fell by 1.3 trillion won last year, but the management has not taken responsibility for this situation,” the POSCO union said in a statement. “Workers who devoted themselves to the restoration work, on the other hand, were forced to share the burden.”
Amid the global economic downturn last year, POSCO Group switched to an emergency mode, asking its employees to find ways to cut costs. After Typhoon Hinnamnor caused serious damage last September to POSCO's main steel mill in Pohang, North Gyeongsang Province, the company set up a task force for emergency management.
Despite such efforts, domestic securities firms expect the first-quarter operating profit of POSCO Holdings to drop 72 percent year-on-year to 632 billion won. The company's annual operating profit also halved last year to 4.8 trillion won from 9 trillion won in 2021.
POSCO Group explained that its decision on the stock grant for its executives was made in 2022.
“The decision was made to lead our executives to pursue responsible management,” a company spokesperson said. “The executives are not able to sell their stocks unless they leave the company.”
The group's explanation, however, was not persuasive enough to convince the “founding fathers” of POSCO, who leveled criticism at the incumbent management in a statement they published on April 10.
“POSCO ridiculously related its stock grant with the responsible management,” former POSCO Vice President Yeo Sang-hwan said. “The chairman should prioritize taking his responsibility, rather than focusing on serving out his term.”