KakaoBank employees at loss over employee stock ownership plan

The Korea Times

The Korea Times

Finance

Tue, September 26, 2023 | 01:13

Companies

KakaoBank employees at loss over employee stock ownership plan

Posted : 2022-08-04 17:21

Updated : 2022-08-04 17:29

KakaoBank's Pangyo headquarters in Seongnam, Gyeonggi Province / Newsis

By Anna J. Park

KakaoBank's stock price rose by 4.78 percent, ending at 32,900 won ($25) on Thursday's trading session, following the previous day's solid first-half earnings report. The digital bank raked a record-high net profit of 123.9 billion won in the first half, which is 6.8 percent year-on-year increase.

Despite enjoying a stock price high since late June, employees of the internet-only bank cannot enjoy the ride to the fullest.

Many of them are monitoring the stock price anxiously, as the stock price at Thursday's closing is still more than 15 percent lower than its initial offering price of 39,000 won, set last summer at the time of the bank's listing debut on the main benchmark KOSPI.

At the time of the IPO, KakaoBank allocated 19.5 percent of its offering shares to its employee stock ownership plan, or a total of 12.7 million shares at a price of 39,000 won per share, which is the same as the initial offering price.

Given that the total number of employees at the time was 1,014, each employee of the bank purchased 12,567 shares on average. That means, on average, each employee bought 131 million won worth of bank shares. As Thursday's closing price is about 15 percent lower than the initial price, it means that they suffered a loss of over 19 million won per employee, on average.

The reason that they could not sell the shares following the IPO last August, when the prices nearly reached 100,000 won per share, was that they were subject to a one-year lock-up period.

Now that it's been nearly a year since the bank's IPO, the lock-up period is slated to end this Saturday, and employee shareholders would be able to sell their stocks on the market.

However, due to the sluggish stock price much below the initial offering price, it's not likely that the company employees would cut their losses by selling on the market next week.

"Of course, employees who purchased the stocks through the stock ownership plan cannot be feeling good about this. But in general, we're hoping for the share price to increase in the near future, given the company's solid earnings. The company is also actively communicating with employees about earnings prospects," an employee of the bank told The Korea Times on condition of anonymity.

annajpark@koreatimes.co.kr