Last year, Jo Joo-wan, CEO of LG Electronics, was reported to have received nearly 3 billion won in compensation. The average annual salary of LG Electronics employees has also exceeded 100 million won for three consecutive years. LG Electronics significantly increased its research and development (R&D) expenses last year based on performance growth.
According to LG Electronics' 2024 business report disclosed on the 17th, CEO Jo received a total of 2.992 billion won, comprising a salary of 1.562 billion won and bonuses of 1.43 billion won. Ryu Jae-cheol, head of the Home Appliance Division (president), received 2.617 billion won, while Park Hyung-se, head of the Mobile Solutions Division (president), received 1.749 billion won.
The average annual salary per employee at the company was recorded at a historic high of 117 million won. This means that the average compensation for LG Electronics employees has exceeded 100 million won for three consecutive years since 2022. This is interpreted as a result of the company's historically high performance recorded for three consecutive years from 2021 to 2023 being reflected in the management performance bonuses.
Earlier, LG Electronics paid up to 710% of the base salary as management performance bonuses at the beginning of 2022. The management performance bonuses at the start of 2023 were at a level of up to 550% of the base salary. Last year, the maximum performance bonus was set at 665% of the base salary.
The gap in average salary between LG Electronics and Samsung Electronics is also narrowing. Samsung Electronics' employee salaries are known to be at the industry's highest level. The salary gap between the two companies, which was 47 million won in 2021, decreased to 23 million won in 2022, and further narrowed to 14 million won and 13 million won in 2023 and last year, respectively. Last year, Samsung Electronics had an average annual salary of 130 million won per person.
Fueled by performance growth, LG Electronics' investment in R&D expenses also hit an all-time high. Last year, LG Electronics invested 4.7632 trillion won in R&D expenses, an increase of 479.8 billion won (11.2%) compared to the previous year.
As LG Electronics focuses on strengthening its competitiveness in future food businesses such as AI home, electric and electronic equipment for vehicles, and heating, ventilation, and air conditioning (HVAC), it is interpreted that R&D expenses have also increased significantly. LG Electronics is strengthening R&D for innovative products and technologies, such as smart appliances, integrated solutions, and personalized AI home. It is also reinforcing the automotive and HVAC businesses as key aspects of its business-to-business (B2B) operations.
The expected investment amount by division is highest in the Home Appliance Division (HS Division) at 1.1605 trillion won, followed by the Vehicle Solutions Division (VS Division) with 936.9 billion won. The MS Division, which is responsible for TV operations, and the ES Division, which oversees HVAC, are projected to spend 377.4 billion won and 150.3 billion won, respectively. Other business sectors are expected to invest 1.7094 trillion won in areas such as research and development and infrastructure investment.