The value of the restricted stock units (RSUs) granted to Kim Dong-Kwan, senior vice chairman of Hanwha Group, was estimated at about 270 billion won as of the end of last year. It is seen as the result of a sharp rise in the share prices of Hanwha Aerospace and others amid a boom in the defense industry market.
According to the semiannual reports of Hanwha, Hanwha Aerospace, and Hanwha Solutions on the 17th, the market value of the RSUs that the senior vice chairman received from the three companies totaled 268.2 billion won as of the end of last year. Hanwha Aerospace accounted for 165.1 billion won, Hanwha for 77.1 billion won, and Hanwha Solutions for 26.0 billion won.
RSUs are a compensation system that grants shares for free when performance targets are met. Hanwha Group introduced the RSU system in 2020. The senior vice chairman has been granted RSUs every year since 2020 at Hanwha and Hanwha Solutions, and since 2021 at Hanwha Aerospace.
The number of Hanwha Aerospace RSUs yet to be delivered stood at 175,410 shares as of the end of last year. Multiplying that by the year-end closing price of 941,000 won gives an estimated market value. Hanwha Aerospace shares were in the low 100,000-won range at the end of 2023, but then surged to nearly 10 times that by the end of last year as defense stocks rallied together.
At Hanwha, the undelivered amount was 944,548 shares as of the end of last year, and the closing price was 81,600 won. At Hanwha Solutions, the undelivered amount over the same period was 970,718 shares, and the closing price was 26,800 won.
The condition for RSU share delivery is that no intentional and significant loss or liability arises for up to 10 years. If the senior vice chairman meets this condition, starting in 2030 the RSUs can be delivered to him sequentially each year.
A Hanwha official said, "Because RSUs are subject to an agreement to deliver after a certain period, converting their value based on the year-end share price is meaningless," adding, "Senior Vice Chairman Kim and his younger brothers, Kim Dong-Won, vice chairman of Hanwha Life Insurance, and Kim Dong-Sun, president of Hanwha Machinery & Service Holdings, received Hanwha shares as a gift from their father, Chairman Kim Seung-youn, effectively completing the succession."