High gold price prompts companies to honor employees with cash instead

Gold bars are displayed at a Korea Gold Exchange branch in Seoul's Jongno District, Monday. Yonhap

Soaring gold prices are prompting companies to replace gold with cash in corporate awards that honor long-serving or outstanding employees, industry officials said Wednesday.

This month, the purchase price of gold surged past the key threshold of 1 million won ($702) per don, a traditional Korean unit equal to 3.75 grams, amid heightened economic risks and growing global demand for the precious metal as a safe haven asset.

The price has nearly doubled compared to the start of 2025, when it was 533,000 won per don.

GC Biopharma, a pharmaceutical company, recently announced that it will honor long-serving employees with cash, in what is seen as a bid to reduce costs.

Previously, the company’s employees received gold measured in don, with awards corresponding to 10, 20, 30, and 40 years of service.

Starting this year, GC Biopharma plans to provide cash prizes of 5 million won, 10 million won, 15 million won and 20 million won for these milestones.

Seegene, a molecular diagnostics company, also announced they were switching awards from gold to cash.

For every five years of service, the company gave employees five don of gold, along with a special vacation.

Industry officials said the shift reflects financial pressure caused by an increase in global gold prices, which recently exceeded $5,000 per ounce for the first time, up from about $2,000 two years ago, a 2.5-fold increase.

A weakening Korean won has further raised the cost of gold domestically.

According to the Seoul Foreign Exchange, the cost of imported gold surged from 2.65 million won per ounce in January 2024 to 7.46 million won this January, a 2.8-fold increase.

“Awarding long-service prizes in gold now costs many times as much as it did years ago,” an official said. "Even companies that still provide gold awards are considering switching to cash or adjusting the gold weight."