Samsung Chairman Lee Jae Yong Maintains Unpaid Management for 7th Year
Receives Dividend of 3.244 Trillion Won
Tesla’s Musk Also Forgoes Salary
Due to their large amounts, corporate CEOs’ annual incomes often spark controversy as soon as they are announced. However, the wealth of CEOs who earn “zero per hour” is now a hot topic.
A CEO of a company receives a salary through various affiliates.
For instance, according to the business report released by HL Holdings on the 18th, Chairman Jeong Mong Won received a total of 2.76 billion won ($2.3 million) in 2023, including 2.22 billion won in salary and 563 million won in bonuses.
In addition, Jeong received additional compensation from HL Mando, HL Clemove, HL D&I, and other major affiliates within the group.
He received 2.45 billion won from HL Mando, including 2.21 billion won in salary and 249 million won in bonuses. He also received 1.55 billion won from HL Clemove, which includes 1.2 billion won in salary and 35 million won in other labor income. From HL D&I, he received a salary of 1.0846 billion won.
So, how much is Lee Jae Yong’s salary as head of Samsung Electronics, the number one company in South Korea? Lee has been maintaining unpaid management since 2017. This is his philosophy, which he has kept for seven years already in 2024.
Lee Jae Yong’s wealth, which he has been maintaining unpaid management, is estimated at $8 billion, or about 10.7184 trillion won ($9 billion), which is astronomical. He is also ranked as the second richest person in Korea, following Chairman Kim Byung Ju of MBK Partners.
How has Samsung Electronics Lee Jae Yong been maintaining his wealth?
Experts point to stock dividends. As the major shareholder of his company, he receives the corresponding dividends.
After COVID-19, the securities market gradually regained vitality, and various companies strengthened their shareholder return policies.
As a result, the heads of each company received more dividends. The total dividends to be received by the heads of the top 10 groups in Korea in 2023 are expected to exceed 800 billion won ($670 million).
On March 14, Chaebol.com announced the results of the total dividends (combined mid-term and final dividends, some of which are the sum of estimates) for the 2023 fiscal year of the top 10 group heads.
The total amount of dividends to be received by the heads of each group is expected to increase by about 7.3% or 554 billion won, to 8.196 trillion won ($6.9 billion), compared to last year’s 7.642 trillion won ($6.4 billion).
Among them, Lee Jae Yong took first place in dividends. He is expected to receive 3.244 trillion won ($2.7 billion), an increase of 6.4% from the 2022 dividend. He is known to receive cash dividends from affiliates such as Samsung Life, Samsung SDS, and Samsung C&T.
Following in second place is Hyundai Motor Group Chairman Chung Eui Sun, who will receive 155.9 billion won ($130 million). His dividend has surged 39.9% from 2022 due to Hyundai Motor, where Chung is a major shareholder, significantly increasing its dividend rate.
While the heads of representative companies in Korea are unpaid, what about the salary of Elon Musk, the head of SpaceX and Tesla in the United States?
Musk, like Lee Jae Yong, continues ‘unpaid management.’ However, Musk is a tycoon alternating between first and second place in the world’s rich list. The reason Musk maintains his wealth is stock options. Musk’s wealth is mainly known to be in Tesla stocks. He is a major shareholder who owns 21.9% of Tesla’s shares.
Even without separate performance rewards, his assets grow according to the degree of corporate value enhancement. Musk has generally not received a basic salary and has been compensated mainly with stock options. In 2020, he received more than 7 trillion won ($5.8 billion) in stock options alone.
Meanwhile, Musk had an experience of being banned from receiving performance pay by a U.S. court at the end of last January.
Tesla’s board of directors decided to pay Elon Musk a performance bonus of $55.8 billion. The U.S. court ruled that Musk violated his duty of loyalty to the company and ordered the board to cancel the payment.
In the United States, performance pay is a compensation package set in advance after the company achieves previously set corporate value-related goals. $55.8 billion is over 74 trillion won ($62 billion) in Korean currency. This significant amount is not comparable to the case in Korea and the United States.
Elon Musk, who almost received a performance bonus of $55.8 billion, is currently achieving considerable success in SpaceX, a private space company. SpaceX is showing significant technological prowess by sending researchers to the International Space Station in cooperation with NASA.
Musk is also developing a giant spaceship called Starship to reach his dream destination, ‘Mars,’ and is conducting test flights. Although Starship has not yet succeeded in flying, it shows gradual growth with increasing flight times.
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