‘Performance Pay Controversy’ SK Telecom’s Labor-Management Conflict Ends…New Incentive Pay System Discuss

On the 9th, the labor and management of SK Telecom, which had recently been controversial over incentive pay, agreed to improve the incentive payment system. As a result, the labor-management conflict, which was triggered by the recent reduction in incentive pay, was ended despite the previous level of management performance.

The labor and management of SK Telecom will form a joint TF and establish a new incentive system in the first half of this year. The plan is to apply the revised standard when paying incentives next year.

Labor and management will work together to design an improvement plan for the current incentive payment method in a joint TF. Through this, the plan is to significantly improve the payment method in which the majority of members do not receive average incentives, thereby increasing the proportion of members paying above the standard amount.

Currently, SK Telecom has set EVA as an incentive payment standard. EVA is a net income obtained by subtracting capital expenses such as corporate tax, interest, and dividends from shareholders from operating profit. Even if operating profit increases, EVA may decrease.

The union pointed out that despite SK Telecom’s sales of 18,6247 billion won and an operating profit of 1,349.3 billion won last year, an increase of 5% and 21.8% year-on-year, the scale of incentives has decreased compared to the previous year. Accordingly, it was argued that the standards for incentive payment should be improved.

SK Telecom’s CEO Park Jung-ho talked about the current incentive standards at a town hall meeting. Later, as a result of discussions between both labor and management, they came to a consensus on establishing a new incentive system. The union also said, “We welcome the company’s active acceptance of the opinions of members who wish to operate a transparent incentive system.”

SK Telecom said, “Through continuous dialogue and discussions between labor and management, we have agreed to create a predictable and transparent incentive system in the future.” “SK Telecom’s labor and management will continue to strengthen harmony and trust between labor and management through sincere dialogue and communication. I did,” he added.