SK ecoplant to hand out stock grants to all employees

SK ecoplant CEO Park Kyoung-il speaks during a shareholders' meeting earlier this month in Seoul. Courtesy of SK ecoplant

By Anna J. Park

SK ecoplant plans to distribute stock grants to all of its employees in order to bolster company morale prior to its IPO scheduled in 2023.

The construction and waste-management company recently said it plans hand out 376,940 common shares to its 4,559 employees. The company also intends to award around 300 million won worth of its stocks to the firm's CEO Park Kyoung-il, who took the leading position in October this year.

The firm had previously sold some of its own shares to the company's employee stockholders' association, but this is the first time it will distribute its stocks for free. Compared to stock options, which accords employees the right to purchase company shares at a given price within a specific timeframe, stock grants are a stronger motivational tool, as they are given free to employees.

“The company plans to raise employees' morale ahead of its IPO by distributing company shares to them for free as stock grants. From a mid- and long-term perspective, the company aims to share the fruit of company growth with its members,” an official of SK ecoplant said.

Part of the reasons behind bestowing the stocks is that it plans to reduce resistance stemming from employees of its previous plant business divisions.

In August, SK ecoplant decided to spin off its plant business under the name of BLH Engineering, which is a subsidiary of SK ecoplant. The newly-created subsidiary's 50.01 percent stake was then sold to a consortium of Mirae Asset Securities and EUM Private Equity at some 450 billion won in October, while the remaining 49.99 percent stake is maintained by SK ecoplant. BLH Engineering will again merge with SK ecoengineering, a new spinoff from SK ecoplant in early January next year.

Those employees who were affected by the spin off from SK ecoplant have protested against the company, asking for a guarantee of the same level of salary and compensation. They will also receive SK ecoplant's stock grants in a move which looks to be aimed at appeasing them.