Naver, Kakao employees join call for better bonuses
Employees of Naver and Kakao are the latest to publicly challenge their employment benefits, calling on the heads of the companies to revamp the compensation systems just weeks after workers at chipmaker SK hynix forced its management to overhaul their bonus system.
In response to the criticism, Naver explained that it has been offering a compensation system based on long-term results such as stock options.
Naver CEO Han Seong-sook held an online conference call with employees on Thursday afternoon to discuss the issue.
Still, the heads refrained from detailing how bonuses are determined and paid to each employee, a request that had been made by the company's labor union.
Earlier in the month, the labor union at Naver sent an email to all employees expressing their dissatisfaction about bonuses that Han had revealed in a letter last month.
The labor union argued that the size of the bonus was too low compared to the record profit the company achieved last year.
The portal giant recorded net profit of 836.2 billion won ($754 million) last year, a 110.7-percent increase on year, mainly led by more people staying home and using computer devices due to social distancing guidelines amid the coronavirus pandemic. The performance beat analyst expectations of 696.7 billion won in net profit.
But the conflict intensified when the company requested the union recall the email, arguing that they used the company email system when dealing with issues that are not related to work.
"The company has been compensating employees based on groups who have showed a 'move' toward further growth, not based on short-term profits," Han explained during the session. "In order for employees to grow with the company, we've been offering not only bonuses but stock options to all employees."
Since 2019, Naver has been offering its employees a 10-million-won stock option every year. As the stock price for the company has increased nearly threefold in recent years, employees can make 19 million won in profit if they choose to cash in those shares right now.
Employees can exercise the option from Feb. 27.
"As the stock price increases when years of effort finally bear fruit, our compensation system is incomparable to other listed company," Han added. "We're continuously trying harder in order to become the best in the industry in terms of compensating employees."
Lee Hae-jin, a global investment officer at Naver, also participated in the session and discussed the future plans of the company.
"I feel very grateful to all the employees who've been working so hard until now," Lee said. "One of the happiest pieces of news this year is that the efforts of our employees can be compensated by the stock option for the first time this year."
Lee also added that he will have an additional conference session with employees in two weeks to discuss the company's plans to go global.
The average annual salary of a Naver employee is about 81.8 million won. In terms of salary, Naver ranks in the top 3 among Korean IT companies, with NCSoft, whose employees receive some 81.1 million won a year, and Kakao, whose employees get some 82 million won in annual salary.
With contactless business becoming an established norm, IT companies have been working to increase employee salaries in order to secure more talented developers.
On Feb. 1, game company Nexon announced that it will offer a pay rise of 8 million won to all employees as an attempt to secure the best talent in the country.
Game developer Netmarble on Feb. 10 also said it will offer a pay rise of 8 million won for all its 3,500 employees.
Kakao also announced that each of its employees will be offered 10 Kakao shares — worth some 5 million won.
“These days, it is hard to satisfy employees as long as the company offers large bonuses or increases their salary just like other companies,” said a source from an IT company in Pangyo, Gyeonggi.
Naver has grown quickly, especially in the past year. Its market cap doubled to 64 trillion won in a year, mainly led by the coronavirus outbreak.
“Naver’s position in the market moved up after the Covid-19 outbreak, but employees feel like their position is still in the same place,” a source from a Korean IT company said. “Every company these days is trying hard to come up with sustainable bonus payment systems.”
Kakao Chairman Kim Beom-su on the same day also vowed to improve the company's compensation and performance assessments after some workers raised doubt over the system.
"The best talents should be treated best," Kim said during the session. "If Kakao's compensation system is worse than our rivals, we should make some improvements.
"I want you all to give us some time to make long-term changes. Kakao may not be doing its best at the moment, but we will change in the long term."
BY CHEA SARAH, SHIM SEO-HYUN [firstname.lastname@example.org]