Naver union takes complaints over pay, benefits to AGM

Disagreement over staff compensation continued at Naver's annual shareholder's meeting on Wednesday, with labor union representatives calling on the company to increase compensation for rank and file employees.

Some employee benefits were on the table at the shareholder meeting, with approval granted for a stock option of 1.1 million shares for 3,253 Naver employees.

The option can be exercised from March 2023 at a price of 362,500 won, which is 6 percent lower than Naver's Wednesday closing price. According to the company, that gives each employee more than 10 million won in stock.

A larger stock option was granted to top executives: 120 of them, including CEO Han Seong-sook, were given 806,000 shares that could be exercised from March 2024.

This is the third year Naver has offered stock options to its staff as compensation. The first group of recipients in 2019 became eligible to exercise their right from March this year.

Yet despite the stock options, the IT firm has been grappling with complaints from its labor union over compensation, and particularly over the disparity between the majority of employees and the top brass.

In a letter sent to all Naver staff last month, the union asked for clarification on why this year's incentives were similar to last year's despite stronger profits. Having benefited from the coronavirus pandemic and social distancing measures, Naver saw its 2020 net profit more than double to 836.2 billion won ($739 million).

During the shareholder's meeting, Wednesday, Naver's labor union head Oh Se-yoon questioned the disparity between the increase of incentives between for top executives and general employees — saying it was creating "relative deprivation" among junior staff. Oh participated as a delegate representing more than 4,500 shares owned by union members.

"For years, Naver has broken records and yet the compensation for [general] staff has largely remained the same," he said. "Senior executives, on the other hand, have seen rapid payment increases.

"There's a severe degree of mistrust in our management and the willingness to work is dropping fast. The company is making sluggish investments in people, its biggest asset, under the excuse of '[increasing] management efficiency.'"

The Naver union's push to improve compensation comes after a number of major Korean IT firms have recently announced significant pay rises for employees.

Last month, Nexon and Netmarble said they would raise wages by 8 million won for all employees this year. NCSoft announced a bigger raise of at least 10 million won.

Naver's founder Lee Hae-jin asked for employees' understanding in a letter this month, saying that the company's executives have a duty to juggle growth and compensation. He also expressed concern over the sudden pay rise plans in the IT industry, saying it had taken on a "competitive nature" and may create side effects in the long term.

In the Wednesday meeting, Naver's board members again asked for employees' patience.

"The board will make considerations to find the best system that can benefit shareholders, employees and ensure long-term growth," said Lee In-moo, a KAIST professor of business and external member of Naver's board.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]