Shin Dong-bin, chairman of LOTTE Group, was reported to have received the highest salary among owners in the food industry last year. It is expected that the total compensation, including payments from other affiliates aside from LOTTE Wellfood and LOTTE Chilsung Beverage, will exceed 20 billion won.
◇ Lotte Shopping employee salaries at a 10-year low
According to the Financial Supervisory Service on the 26th, Shin Dong-bin, chairman of LOTTE Group, received a salary of 2.2 billion won and bonuses of 382 million won totaling 2.6 billion won from LOTTE Wellfood last year. He received a salary of 2.998 billion won and bonuses of 495 million won from LOTTE Chilsung Beverage, totaling 3.493 billion won. Last year, the total compensation received by Chairman Shin from LOTTE Wellfood and LOTTE Chilsung Beverage was 6.098 billion won, a 10.2% increase from the previous year. The previous year, he received 2.443 billion won from LOTTE Wellfood and 3.093 billion won from LOTTE Chilsung, totaling 5.536 billion won.
It is anticipated that Chairman Shin received the highest salary in the industry last year when compensation from the holding company and other affiliates is combined. Although Cho Hyun-sang, vice chairman of HS HYOSUNG, received 32.382 billion won last year, excluding the retirement payment of 17.192 billion won, his compensation was 15.19 billion won, which is less than Chairman Shin's.
Last year, Chairman Shin received a salary and bonuses of 5.972 billion won from LOTTE Corporation, 380 million won from LOTTE Chemical, and 1.964 billion won from Lotte Shopping. When combined with the compensation from LOTTE Wellfood and LOTTE Chilsung Beverage, it totals 17.834 billion won. When adding the compensation from Hotel Lotte and LOTTE Mitsui which have not yet disclosed business reports, the total is expected to exceed 20 billion won. Chairman Shin received 3.6 billion won from Hotel Lotte and LOTTE Mitsui in 2023.
This contrasts with last year when the LOTTE Group faced difficulties across the entire group amid liquidity crisis rumors. LOTTE Group experienced a decline in performance from its two major pillars, Lotte Shopping (retail) and LOTTE Chemical (chemicals), leading to a rise in rumors regarding a crisis. In an effort to quell these rumors, LOTTE Group used its key asset, LOTTE World Tower, as collateral for credit enhancement last year.
There is also a trend of reducing personnel. As of the end of last year, the number of non-registered executives at Lotte Shopping was 75, the smallest scale in the last 10 years, and the number of employees at Lotte Shopping has decreased by 844 to 18,832. The total salary last year was 922.3 billion won, the lowest in the past 10 years. This reduction trend has continued since 2019.
◇ Lee Jae-hyun, chairman of CJ Group, sees a 95% increase in compensation compared to the previous year
In terms of the rate of increase, there are owners who received a greater raise than Chairman Shin. Lee Jae-hyun, chairman of CJ Group, received 3.749 billion won from CJ CheilJedang last year. When adding the salary of 4.382 billion won and bonuses of 11.243 billion won from the holding company CJ, his total compensation is 19.374 billion won. Chairman Lee's compensation last year increased by 95% from 9.936 billion won in the previous year.
Both CJ Group and CJ CheilJedang recorded increases in sales and operating profit last year. Operating profit exceeded the 20% range, with CJ CheilJedang's operating profit increasing by 20.2% to 1.553 trillion won. The operating profit of the holding company CJ increased by 24.9% to 2.5475 trillion won. A CJ official noted, "The high rate of increase in the chairman's salary reflects long-term incentives paid based on the performance from 2021 to 2023."
Kim Ho-yeon, chairman of Binggrae, received the third highest salary in the food industry last year with 3.324 billion won (salary of 2.435 billion won and bonuses of 885 million won). Chairman Kim's salary increase rate is 61.2%. Binggrae recorded sales of 1.463 trillion won and an operating profit of 131.2 billion won last year, the highest ever since its establishment.
Although it achieved the highest results in history, there are places that have instead reduced the owner's salary. Last year, Samyang Foods recorded its highest results, but the salary of Vice Chairman Kim Jeong-soo decreased by 18.4% compared to the previous year. Vice Chairman Kim received 1.876 billion won from Samyang Foods, comprising a salary of 1.25 billion won, bonuses of 625 million won, and other earned income of 1.52 million won. The criteria for performance bonuses were changed last year, resulting in bonuses being cut to half.
◇ "Duplicate salary payments, a characteristic of Korean owners"
There is a critical perspective regarding the fact that some corporate owners receive hundreds of millions of won in compensation through multiple affiliates. Corporate owners typically only attend affiliate board meetings but receive duplicate salaries as if they worked full-time at all companies, which is considered inappropriate. This also affects their retirement compensation calculations in the future. In the case of publicly listed companies, criticism may be even stronger. If an owner's salary is excessively high, it could harm shareholder interests.
Kim Woo-chan, a professor at Korea University, stated, "Receiving salaries as if working full-time at all affiliates is a characteristic seen only among Korean owners," adding, "This is a phenomenon rarely found even overseas. Professional managers may take on multiple roles, but they do not receive separate salaries while holding the title of non-executive directors."
Meanwhile, it was reported that the annual salaries of other food industry owners last year were mostly between 2 billion won and 4 billion won. Dam Cheol-gon, chairman of ORION Group, received 3.082 billion won (salary of 1.513 billion won and bonuses of 1.569 billion won) from ORION. At ORION Holdings, he received a salary of 780 million won and bonuses of 800 million won, totaling 4.67 billion won.
The chairman’s wife, Lee Hwa-kyung, vice chairperson of ORION, received 2.397 billion won from ORION and 1.235 billion won from ORION Holdings, totaling 3.632 billion won. Combined, the couple's salaries amount to 8.32 billion won. ORION Group has effectively shifted to a professional management system, led by Vice Chairman Heo In-cheol.
Shin Dong-won, chairman of Nongshim, received compensation of 1.73273 billion won. His compensation comprises a salary of 1.5846 billion won, bonuses of 143.7 million won, and other earned income of 443,000 won, resulting in a total increase of 2.5% compared to the previous year. Ham Young-jun, chairman of OTOKI, had a compensation of 1.36 billion won last year, which was an increase of 8.2% from the previous year. He received 960 million won as salary and 400 million won as bonuses.
Lim Se-ryeong, vice chairperson of Daesang Group, received an annual salary of 1.088 billion won last year, a decrease of 4% from the previous year (1.133 billion won). However, Lim's father, Lim Chang-wook, honorary chairman of Daesang Group, received a salary of 2 billion won and bonuses of 880 million won, totaling 2.088 billion won from Daesang Holdings.