“I uploaded the next door…” 1 trillion record-breaking profits Naver, incentives are infested

Is it the contrast of the highest performance ever? The labor-management conflict over Naver’s incentive pay is not easily closed. Last year, sales increased by 22% and the highest operating profit ever, but the compensation for employees remains in place. It is noteworthy whether the incentive rebellion of SK Hynix and Samsung Electronics employees, which was called by the chairman, will spread to IT companies in Pangyo Techno Valley starting with Naver. In the past, after Naver employees formed a labor union in the form of a branch under the KCTU in 2018, unions have been created one after another in other IT companies. Here is the main focus of the Naver incentive conflict.

On the 25th, Naver decided to have a question and answer session on incentives at the company-wide online briefing. Originally, it was a briefing session on employee-owned stock options, which was available for the first time this year. However, as dissatisfaction with incentives has recently risen to the surface, Naver decided to address the’reward system guide’ at the briefing.

On the 6th, Naver’s union sent an e-mail to all employees through an in-house e-mail stating that’the company’s performance is the best in history, but the employee compensation is not met’, and the company is poised to sanction it as’using e-mail that is not related to work’. Conflict became visible.

Earlier, according to the results of the board of directors, CEO Han Sung-sook sent a CEO letter at the beginning of the year to explain the scale and grade of the incentive pay. However, it is known that some employees complained to the union, saying that some of the e-mails were sad. They said that they had a hard time with their employees, but attributed the main factor in their performance to the Corona 19. Last year, Naver recorded 5,3041 trillion won (+21.8%) in sales and 1 trillion 2153 billion won (+5.2%) in operating profit, all of which were record highs.

The union also insisted that in the company’s e-mail,’disclose performance standards transparently’. In the IT industry, where the ransom is high depending on your skill, the amount of incentive pay is important, but you need to know the standards. When the Naver union was launched in 2018, the main demand posed was “disclosure of transparent incentive standards”. At the rally, a banner was hung asking’Is the incentive to be a random box?’

Naver said, “The board of directors judges the overall performance of the company, and after explaining the performance grade in the CEO letter, the head of the organization also interviewed each employee individually.”

Earlier this month, the company paid a total of 3.5 billion won worth of treasury shares to 90 executives, including 1,000 shares (approximately 400 million won) to a representative. Regarding this, Naver explained, “We paid some of the incentives to each executive in stock, not an additional bonus.”

The average salary per Naver employee is 81.2 million won, which is ranked as the top 3 in the IT industry along with NCsoft (81.10 million won) and Kakao (82 million won) (based on business report). However, as the non-face-to-face economy and mobile conversion accelerate, the number of places requiring developers is increasing and the ransom is also rising. This is the background of each company declaring a wage increase to prevent manpower churn.

On the 1st and 10th, Nexon and Netmarble each announced that they would increase their annual salary by 8 million won. Subsequently, Kakao announced that it would pay 10 shares of treasury stock (about 5 million won at the current market price) to all employees. On the 17th, there was an incident that was revealed as a misinformation after a report that’NCSoft is raising the annual salary of all employees by 10 million won’ came out. Wage increases and compensation for performance have become a hot topic in the industry. An IT company official in Pangyo said, “If you don’t pay a lot of incentives or at least raise your wages as much as that of the neighboring company, you will not be satisfied with the atmosphere.”

Naver said, “At the end of last year, we raised salaries a lot and we will be able to exercise stock options soon.” The end of this month is when the company’s first stock options paid to all employees are exercised in 2019. Naver employees can earn an average of 36 million won per person based on the current stock price.

However, its rival Kakao has been paying stock options to employees since 2017, and CEOs Minsu Yeo and Sooyong Cho, as well as general employees, have made considerable profits by exercising stock options.

Naver’s market capitalization doubled from 31 trillion won to 64 trillion won in one year. As the status of a Korean tech company has increased, the expectations of its members have also increased.

The’coupang effect’ is also mentioned. As seen from the increase in Naver’s share price due to Coupang’s application for listing in the US, the value of Korean companies and the level of technical manpower will also be reevaluated. According to Coupang’s listing report, the company paid 30.5 billion won (US$3.99 million), combined with the main salary and stock options, to Tuan Pam’s Chief Technology Officer (CTO) from Uber, who signed in last year. An IT industry official who requested anonymity said, “The social and economic status of the company Naver has risen a notch since Corona 19, and it seems that the sentiment of employees that my position remains the same.” We are struggling to come up with a system.”

Reporter Shim Seo-hyun [email protected]