Posco executives to return 20% of salary

New Posco Group Chairman Chang In-hwa announced a seven-strategy plan to reduces costs that includes executives returning 20 percent of their salary.

Posco Holdings Chairman Chang In-hwa [POSCO HOLDINGS]

Posco Group executives, including new chairman Chang In-hwa, will return up to 20 percent of their salaries in the latest effort to cut costs to strengthen competitiveness and overhaul corporate governance.

Posco, its steelmaking subsidiary, aims to reduce costs by over 1 trillion won ($730 million) every year.

The plan was one of seven business strategies announced by Chairman Chang Monday, who was appointed to the top spot in March.

The strategies include a focus on the steelmaking business to cut costs, continuous investment in the secondary battery materials business and corporate governance.

Posco will reduce costs by 1 trillion won every year by optimizing steelmaking equipment. Smart factories will be upgraded with AI and robots to increase productivity.

Investment in battery materials, however, will continue. A big merger and acquisition will be made in three years, the company said.

In an effort to overhaul corporate governance, executives will have to return up to 20 percent of their salaries based on their performances.

The group will also consider the abolishment of the stock grant policy that offers corporate stocks to certain executives as a form of compensation.

The policy was first introduced last year by the former chairman but was harshly criticized by the public as some top executives were given large amounts of shares despite the company's worsening earning reports, especially after Typhoon Hinnamnor in Sept. 2022.

“Through the seven-strategy agenda, Posco Group will mark a new milestone to strengthen our business competitiveness and overhaul the overall management," Chang said.

BY SARAH CHEA [chea.sarah@joongang.co.kr]