Debate over operating-profit-linked bonuses has widened into a legislative fight over whether labor, boards or shareholders should control large profit-based payouts.
South Korea's industry minister, Kim Jung-kwan, said on August 6 that he opposes bonus systems tied to operating profit and is discussing revisions to the Commercial Act and Capital Markets Act that could require shareholder approval for large payouts, or at minimum board or shareholder approval. The dispute has broadened from company bargaining into a legislative and regulatory fight over who should control profit-based bonus pools: labor and management, boards, or shareholders. Shareholder groups argue fixed-percentage bonus formulas based on metrics such as operating profit, net income or EVA are profit appropriation decisions rather than working conditions, citing a January Supreme Court ruling on OPI. Labor federations say such formulas remain a legitimate subject for collective bargaining under the Trade Union Act. Kim also said the Coupang issue remains a pending matter in U.S.-South Korea relations centered on the leak of information on nearly 80% of South Korean adults that allegedly went unnoticed for several months.