In the first half of this year, Choo Hyung-wook, CEO of SK Innovation, received the highest compensation among the leaders of South Korea's four major refiners. However, a significant portion of his pay includes a settlement from long-term performance-linked stock (PSU) awarded in the past. Excluding this, Heo Se-hong, Vice Chairman of GS Caltex, had the highest total compensation.
According to the semi-annual reports from the refining industry released on August 26, Choo received a total of 2.733 billion won in the first half of the year, which includes a salary of 630 million won, a bonus of 700 million won, stock-based compensation of 1.4 billion won, and other income of 3 million won. This marks an increase of approximately 115% compared to 1.271 billion won in the same period last year.
The significant rise in Choo's compensation is largely attributed to the stock-based compensation, which accounted for more than half of his total pay. The 1.4 billion won from stock-based compensation stems from PSU awarded during his tenure as CEO of SK E&S before the merger. Excluding this, his salary and bonuses total 1.333 billion won.
When stock-based compensation is excluded, Heo Se-hong of GS Caltex emerges as the highest-paid executive among the refinery leaders, with a total compensation of 2.01 billion won in the first half, up about 41% from 1.415 billion won during the same period last year.
At GS Caltex, CEO Kim Sung-min received 713 million won, the lowest among major refinery executives whose total compensation exceeds 500 million won. The pay gap between Heo and Kim is approximately 1.3 billion won, indicating a compensation structure that favors the owner-executive Heo.
Anwar Al-Hijazi, CEO of S-Oil, received 1.16 billion won in the first half, reflecting a 116% increase from 537.6 million won in the same period last year, the highest growth rate among major refinery executives.
In contrast, both Song Myung-jun and Jeong Im-joo, CEOs of HD Hyundai Oilbank, earned less than 500 million won in the first half, so their individual compensation details were not disclosed in the semi-annual report. According to capital market laws, companies are required to disclose the individual compensation of the top five employees whose total pay exceeds 500 million won.
Looking at the first half performance of the four refiners, SK Energy, responsible for SK Innovation's refining business, reported sales of 25.1892 trillion won and an operating profit of 1.9344 trillion won. GS Caltex achieved the highest operating profit among the four, with sales of 29.7071 trillion won and an operating profit of 4.1874 trillion won.
S-Oil reported sales of 20.2862 trillion won and an operating profit of 2.1961 trillion won, while HD Hyundai Oilbank recorded sales of 17.1929 trillion won and an operating profit of 2.7576 trillion won.
However, it is challenging to directly compare the compensation of executives across different companies with their respective performances. Each company has different methods for calculating performance bonuses and the timing of long-term incentives. Additionally, stock compensation awarded based on past performance, like that of Choo, can significantly inflate total compensation in a specific quarter.
A source in the refining industry stated, "The compensation of CEOs varies based on each company's pay structure, policies, and criteria for performance bonuses. Therefore, it is somewhat difficult to make uniform comparisons over a specific period."
* This article has been translated by AI.
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