Kim Dong-kwan, vice chairman of Hanwha Group, has seen the value of his restricted stock units (RSUs) approach 270 billion won, driven by a surge in stock prices, particularly in the defense and shipbuilding sectors.
According to the semi-annual reports from Hanwha Corporation, Hanwha Aerospace, and Hanwha Solutions, the market value of the RSUs granted to Kim was estimated at 268.2 billion won as of the end of last year.
By company, Hanwha Aerospace accounted for the largest share at 165.1 billion won, followed by Hanwha Corporation at 77.1 billion won and Hanwha Solutions at 26 billion won. Notably, Hanwha Aerospace's stock price remained around 100,000 won until 2023 but has sharply increased since last year due to a rally in defense stocks, boosting the value of Kim's RSUs.
Kim has been receiving RSUs annually since 2020 from Hanwha Corporation and Hanwha Solutions, and since 2021 from Hanwha Aerospace. Last year, he received 20,684 shares from Hanwha Aerospace, 233,178 shares from Hanwha Corporation, and 398,964 shares from Hanwha Solutions.
However, the current estimated value should not be considered as actual compensation. RSUs are part of a long-term performance compensation system that requires meeting certain conditions over a specified period before shares are granted. The RSUs granted to Kim must not incur significant losses or liabilities for up to 10 years, with actual payouts beginning in 2030. The value may vary depending on the stock price at the time of payout.
Recently, the adoption of RSUs has been on the rise among domestic companies. Since Hanwha introduced them in 2020, other firms such as Naver, Coupang, Doosan, Krafton, and EcoPro have followed suit. Unlike stock options, RSUs retain some value even if stock prices decline, which can encourage long-term employment and performance.
Doosan Group's Chairman Park Jung-won also benefited from the rise in stock prices related to RSUs. In the first half of this year, he received 45.58 billion won in compensation, the highest among major group leaders, with the value of RSUs granted three years ago reaching 37.6 billion won, increasing approximately 13-fold due to the rise in Doosan's stock price.
This has led to concerns that RSUs could be used as a means to strengthen the control of owner families.
In response to these concerns, Hanwha stated, "RSUs were introduced to replace cash bonuses that were previously paid annually, serving as a long-term performance compensation system. The recent increase in estimated value reflects the management performance resulting from the rise in stock prices of the defense and shipbuilding sectors."
They added, "Chairman Kim Seung-yeon has already transferred shares of Hanwha Corporation to his three sons, effectively completing the succession process. The RSUs granted to Kim Dong-kwan also do not significantly influence succession or control enhancement."
* This article has been translated by AI.
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