On the 3rd, data showed that more large business groups are compensating owners and executives with stock instead of cash.
That day, the Korea Fair Trade Commission analyzed 89 corporate groups with asset of 5 trillion won or more that have an owner and found that 15 corporate groups entered into 585 stock grant agreements for owners, relatives, and executives. Stock grant agreements include "restricted stock units (RSUs)," which promise to give stock when a company-set tenure or performance target is met, and "stock grants," which provide stock for free.
The number of stock grant agreements signed last year rose 65.7% from the previous year (353) to 585. Of these, 317 were contracts in which Samsung granted RSUs to its own executives. Doosan, Amorepacific Co., and Kyobo Life Insurance signed stock grant agreements with owners, while Hanwha, Woongjin, and Eugene signed them with second-generation owners.
Kim Min-a, head of the corporate group information analysis team at the Korea Fair Trade Commission (FTC), said, "Stock grant agreements serve as performance compensation for executives, so in themselves they are not largely negative." She added, "To prepare for RSUs and the like concentrating on owner families, we will conduct intensive monitoring."
The average proportion of treasury stock held by the 89 corporate groups is 1.9%, down 0.5 percentage point from the previous year. HYBE and Toss held no treasury stock at all. This appears to be due to the effect of the Commercial Act revision that created an obligation to cancel treasury stock within one year after a company acquires it.
This year, for the first time, the number of companies subject to the rules on unfair private interest exceeded 1,000, totaling 1,047. Companies subject to the rules on unfair private interest are those in which an owner family holds 20% or more equity, or companies in which that company holds more than 50% equity. Companies related to circular shareholding fell from 1,435 last year to 233 this year, an effect of Sajo Group dissolving 1,206 circular shareholding links on its own.
Meanwhile, the internal equity ratio—the share of total equity in the 89 corporate groups held by owners and related parties—is 61.4%, down 1 percentage point from last year. Owner families held an average of 3.5%, and affiliates held an average of 55.5%.