SK On unveils stock-based incentive plan for employees

[Courtesy of SK On]

SK On has decided to grant employees virtual shares equivalent to 30 percent of their annual salary instead of performance bonuses.

According to industry sources on Wednesday, SK On conducted a performance bonus briefing session for employees, unveiling the ‘Value Sharing (VS)’ plan as part of its stock-based compensation linked to performance.

SK On reported an operating loss of 581.8 billion won ($436 million) in 2023, resulting in a 0 percent allocation for performance bonuses. The decision to issue virtual shares aims to attract top talent and encourage employee longevity with the intention of enhancing the company’s competitiveness in the medium to long term.

The scale of VS grants will vary based on individual performance, with an average of 30 percent of the contracted annual salary.

VS represents a form of virtual shares closely tied to SK On’s corporate value. If employees remain with the company for the next three years from the grant date and SK On successfully goes public, the virtual shares will be exchanged for physical shares on a one-to-one basis. But if the IPO does not occur by 2027, the granted rights will expire.

SK On embarked on a pre-IPO journey from December 2022 to June 2023, securing a total of about 4.8 trillion won from various financial investors, including global private equity funds (PEFs). The deadline SK On has committed to for its IPO is the end of 2026.