Minister of Trade, Industry and Energy Kim Jeong-kwan has publicly expressed opposition to the practice of paying so-called "percentage of operating profit" performance bonuses, announcing that the government is pushing to revise the Commercial Act and the Capital Markets Act to address the issue.

Speaking at a Kwanhun Club debate held at the Press Center in Seoul yesterday (the 6th), Minister Kim pointed out that shareholders and investors are excluded from the decision-making process regarding the distribution of a certain percentage of operating profits to employees.

"The owners of a company are its shareholders, and investors who take on risks are comparable to them," Kim said. "Yet, shareholders and investors are left out of the performance bonus debate."

"Who would want to invest or become a shareholder in a company that ignores the opinions and interests of its shareholders and investors?" he added, noting that "ultimately, the damage returns to the management and workers."

"I am against an incentive structure that pays performance bonuses based on operating profit. At the very least, it should require the consent of the board of directors or a shareholders' meeting," Minister Kim stated, defining the distribution of performance bonuses against the interests of shareholders and investors as an "overreach of authority."

He stated that the ministry is discussing amendments to the Capital Markets Act and the Commercial Act with relevant government agencies to mandate a resolution by a general meeting of shareholders when paying large-scale performance bonuses.

The intent is to prioritize utilizing a company's operating profit for reinvestment to secure future competitiveness rather than allocating it for performance bonuses.

Regarding the "Coupang incident," which has emerged as a hot potato in South Korea-U.S. relations, Minister Kim said, "(Perspectives) seem to differ slightly depending on whom you talk to in the United States."

"For example, when I meet with U.S. politicians, I get the impression that there is a very sensitive overreaction regarding Coupang," he introduced. "On the other hand, trade authorities I meet, such as the Department of Commerce and the Office of the United States Trade Representative (USTR), understand the core nature of the Coupang incident much better."

In particular, he pointed out that some members of the U.S. political circle are misunderstanding Coupang as a means to alleviate the trade deficit between South Korea and the U.S.

"Many U.S. politicians often think that agricultural, fishery, and livestock products from the U.S. are being imported into Korea thanks to Coupang," Minister Kim said. "When I tell them that 'most Koreans understand that Coupang imports cheap goods from neighboring China, not from the U.S.,' they are surprised."

He continued, "The essence of the Coupang issue is that information belonging to nearly 80% of South Korean adults was leaked, and this went unnoticed for several months. When I ask U.S. politicians, 'How do you think the U.S. would treat a company that leaked the information of 80% of American adults to a foreign country and failed to properly report it or follow legal procedures?' most of them agree."

Drawing a line, he said, "If the South Korean government had discriminated against Coupang and disadvantaged it simply because it is a U.S. company, could it have grown at such a rapid pace? The South Korea-U.S. alliance is not so fragile as to be shaken by the Coupang issue."

On the topic of allowing early-morning delivery by large supermarkets, which has become a major talking point amid the Coupang situation, Minister Kim showed a positive attitude.

"Taking this incident as an opportunity, we need to ease regulations on domestic retailers to align with changes in the distribution market centered around online shopping," he said. "However, we must also consider the protection of small business owners and micro-merchants to overhaul the system in a balanced manner."

(Photo: Yonhap News)