South Korea’s Kakao labor union has demanded that the company “disclose the criteria behind the concentrated high compensation paid to management,” just 12 days after wage negotiations concluded. The union and management had agreed on July 7 to a 6.3% salary increase and a special incentive payment of 3 million won (approximately $2,100) per employee, but the two sides have now re-entered a conflict phase.

The Kakao chapter of the Korean Chemical and Textile and Food Industry Workers’ Union, affiliated with the Korean Confederation of Trade Unions, issued a statement on the 19th demanding disclosure of executive compensation criteria, saying, “A structure where performance is credited to management while the costs of failure are borne by employees and shareholders is unfair.”

The immediate trigger for the union’s offensive was Kakao’s 2026 semi-annual report released on the 14th. According to the filing, former CEO Hong Eun-taek (now an adviser) received a total of 3.28 billion won (approximately $2.3 million) in the first half, comprising 232 million won (approximately $170,000) in salary, 600 million won (approximately $430,000) in bonuses, 1.69 billion won (approximately $1.2 million) in stock option exercise gains, and 761 million won (approximately $540,000) in long-term incentives. This was the highest amount among Naver and Kakao executives.

Hong Min-taek, the former Chief Product Officer (CPO) who resigned in May amid controversy over the KakaoTalk redesign, received 2.82 billion won (approximately $2.0 million) in the first half. This included 314 million won (approximately $220,000) in salary, 628 million won (approximately $450,000) in bonuses, 1.56 billion won (approximately $1.1 million) in other earned income, and 318 million won (approximately $230,000) in retirement income. CEO Chung Shin-a received a total of 1.21 billion won (approximately $860,000), including 500 million won (approximately $360,000) in salary and 706 million won (approximately $500,000) in bonuses.

Kakao explained that Hong Eun-taek’s long-term incentives and bonuses were based on his performance during his tenure as CEO from 2022 to 2023, paid out in installments over three years starting in 2024. Chung Shin-a’s bonus was calculated based on achieving 98% of Kakao’s standalone revenue target and 110% of its operating profit target for 2025.

Compensation Controversy Spreads to Affiliates

The compensation controversy is now extending to affiliate KakaoBank. CEO Yoon Ho-young received a total of 8.18 billion won (approximately $5.8 million) in the first half, comprising 349 million won (approximately $250,000) in salary, 536 million won (approximately $380,000) in bonuses, and 7.29 billion won (approximately $5.2 million) in stock option exercise gains. Yoon’s stock options were granted in 2019, conditional on reaching 13 million customers and 130 billion won (approximately $92.9 million) in pre-tax profit. KakaoBank explained the payout as “compensation for long-term performance in growing the company over the past decade.”

Based on public filings, the union estimated that Yoon has received approximately 23.1 billion won (approximately $16.5 million) in total compensation from 2020 through the first half of this year. The Kakao union noted, “At a time when labor-management conflict continues, the realization of over 8.1 billion won (approximately $5.8 million) in compensation for the CEO forces us to question the company’s stated criteria for performance distribution.”

KakaoBank’s union staged two full-day strikes on July 31 and August 14, demanding improvements to the wage and performance compensation system. Since the 12th, the union has also been conducting a compliance campaign, refusing overtime and holiday work.

Union Demands and Future Plans

The Kakao union drew a line, stating it is not opposed to high executive compensation per se. Seo Seung-wook, head of the Kakao chapter, said, “Management’s long-term contributions are rewarded with billions of won, while when it comes to workers’ contributions, the company talks about costs. A structure where performance is credited to management while the costs of failure are shared by employees and shareholders is not fair.”

The union demanded that management disclose executive compensation criteria, apply consistent performance distribution principles to both executives and employees, reflect business failures and social and legal risks in executive compensation, explain the basis for high compensation to retired or transitioning executives, and ensure KakaoBank’s responsible participation in labor-management negotiations.

Backlash is also continuing within Kakao. On Blind, a workplace community platform, a post on the Kakao channel read: “Is former CPO Hong Min-taek worth 1,000 employees? Salary negotiations are delayed for months while they throw themselves a bonus party.”

The union plans not to limit this issue to individual affiliates but to pursue joint bargaining involving Kakao’s major affiliates later this month. A Kakao official said, “Since the union has already indicated it will begin wage negotiations early in October, the focus will be on raising the bonus percentage in next year’s wage and collective bargaining.” A union official said, “We will continue to raise our voice until transparent and fair compensation principles are established across the entire Kakao community.”