Hanwha Vice Chairman Kim Dong-kwan's Stock Compensation Value Reaches 270 Billion Won Amid Surge in Share Prices

It has been revealed that the value of Restricted Stock Units (RSUs) granted to Hanwha Group Vice Chairman Kim Dong-kwan, who introduced the country's first RSU system among major domestic conglomerates, is approaching 270 billion won.

While the value of RSUs can fluctuate depending on the stock price at the time of payout after a certain period, he is expected to receive a substantial amount in stock compensation if the current stock prices are maintained or rise further.

According to the semi-annual reports of Hanwha Corp., Hanwha Aerospace, and Hanwha Solutions released today (August 17), the market value of the RSUs granted to Vice Chairman Kim across these three companies reached 268.2 billion won as of the end of 2025.

An RSU is a compensation system in which stocks are granted free of charge after a certain period of restricted selling and upon fulfillment of agreed-upon conditions.

Vice Chairman Kim is the eldest son of Chairman Kim Seung-youn and is considered the successor to Hanwha Group.

Based on the end of 2025, the RSU value granted to him is the highest at Hanwha Aerospace with 165.1 billion won, followed by Hanwha Corp. with 77.1 billion won, and Hanwha Solutions with 26 billion won.

The cumulative unvested quantity of RSUs for Hanwha Aerospace (quantities that have not met vesting conditions) stood at 175,410 shares as of the end of last year. This market value was calculated by multiplying this figure by the closing price at the end of last year (applied with adjusted stock price) of 941,000 won.

The stock price of Hanwha Aerospace hovered around 100,000 won until 2023, but has surged steeply since last year amid a defense stock rally.

For Hanwha Corp., the unvested quantity as of the end of last year was 944,548 shares, with a closing price of 81,600 won.

For Hanwha Solutions, the unvested quantity as of the end of last year was 970,718 shares, with a closing price of 26,800 won.

Hanwha explained, "The market value may fluctuate depending on the stock price at the time of payout after a maximum of 10 years from the date of grant."

Vice Chairman Kim has been awarded RSUs annually starting from 2020 at Hanwha Corp. and Hanwha Solutions, and from 2021 at Hanwha Aerospace.

The stock payout condition (vesting condition) is that "no intentional, severe loss or liability occurs for up to 10 years."

Under this condition, Vice Chairman Kim can receive RSUs sequentially every year starting from 2030.

Last year, Vice Chairman Kim was granted 20,684 shares from Hanwha Aerospace, 233,178 shares from Hanwha Corp., and 398,964 shares from Hanwha Solutions, with vesting periods set 5 to 10 years later.

RSUs, which compensate for the shortcomings of stock options to secure top talent and drive long-term growth in the United States, are widely used by big tech companies such as Apple and Microsoft.

In South Korea, after Hanwha Group first introduced the system in 2020, it has spread to companies such as Naver, Coupang, Doosan, Krafton, and EcoPro.

In the case of Doosan Group, Chairman Park Jeong-won ranked first in executive compensation among major group heads with 45.88 billion won for the first half of this year. This was influenced by the surge in Doosan's stock price, which caused the value of RSUs he received three years ago to swell 13-fold to 37.6 billion won.

Doosan stated, "This is the result of aligning with the RSU objective of enhancing shareholder value through management motivation and the recent trend of expanding stock compensation. The granted shares are intended for long-term growth drives and will continue to be held, and their evaluation value will continue to change depending on future stock price trends."

While stock options lose all compensation value to '0' if the option is abandoned during a stock price drop, RSUs retain value equivalent to the market price even if the stock price falls.

They also have the advantage of inducing long-term performance and long-term retention compared to stock options.

Although a growing number of companies are adopting RSUs, opinions suggest that system improvements are needed.

The National Assembly Research Service pointed out in a 2024 report that, unlike stock options, RSUs can be granted to controlling shareholders or owner families without quantity limits, noting that they "can be abused as a means of succession of management control or strengthening dominance, centered around large conglomerates."

(Photo: Provided by Hanwha Group, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.