Hyundai Motor chair says to upgrade incentive, promotion systems

The Hyundai Motor Group will upgrade its performance-based incentive and promotion systems to the global levels to compensate its top performers and attract talents, as the South Korean automotive group expects to make a strong rebound from last year's pandemic-caused slump, its Chairman Chung Euisun said on Mar. 16.

His remarks on compensation followed SK Hynix Inc.'s decision last month to improve the transparency of its employee evaluation and performance-based bonus payment systems, in response to growing dissatisfaction among its MZ generation workers about the chipmaker’s frugal compensation package.

"I feel guilty and heavy responsibility for making you feel unrespected despite your contribution to our company," Chung told an online town hall meeting held at its headquarters in Seoul. "We will further elaborate and upgrade our systems relating to performance-based incentives and promotion." 

Performance-based compensation was one of the most asked questions posted by Hyundai Motor workers on its internal website, in advance of Chung’s town hall meeting.

For SK Hynix, its MZ generation workers, or those born between 1980 and 2000, voiced their complaint about lower performance bonuses than the rival Samsung Electronics' on its in-house chatrooms and called for revealing the criteria for the company's incentive payments. To allay their grievances, its group Chairman Chey Tae-won vowed to return and share his annual salary of 3 billion won ($2.7 billion) with his employees.

Chung, 50, took over as Hyundai Motor Group's chairman from his father and ex-chairman Chung Mong-koo last year. 

The following is an edited transcript of key Q&As with Chung during the live town hall meeting that lasted one hour and 15 minutes:

Q. KEY CONCERN DURING GLOBAL PANDEMIC:

"Securing liquidity was the top priority in the hugely uncertain and unprecedented situation." "We injected 1 trillion won ($882 million) worth of liquidity into our suppliers and needed to invest in our future businesses as well."

Q. CONCERNS ABOUT NEW BUSINESS INVESTMENTS:

"I agree with your concerns about them and also have high expectations for them. For self-driving, hydrogen fuel cells, urban air mobility (UAM) and robotics businesses, we need to invest quickly and develop technologies to become a leader."

"It is difficult to say when they will begin to make profits, but I expect them to show their results down the road." "Additionally, any progress we would make for E-GMP-based electric vehicles such as IONIQ 5 and Kia's EV6 will give us the confidence to prepare for the future."  

"In the future, we will take robotics (device) wherever we go, instead of a mobile phone."

Q. SELF-DRIVING CAR:

"Motional, our self-driving joint venture with auto parts supplier Aptiv, recently received the Level 4 authentication from Nevada, the US. "It became the first self-driving car maker to receive it in Nevada. We expect to commercialize self-driving cars in 2023."

Q. PERFORMANCE-BASED COMPENSATION:

"I feel guilty and heavy responsibility for making you feel unrespected for your contribution to our company." "I realized that our traditional way to give out bonuses and to communicate with you failed to meet your expectations."

"It is important to evaluate our performance in a fair and transparent manner and reflect them into bonuses and promotions. We will further elaborate and upgrade our systems relating to performance-based incentives and promotion to create a working environment that motivates you."

(Note: Hyundai Motor posted 2.4 trillion won in operating profit last year, down 33.5% on the year. Its average bonus payment for 2020 dwindled to 150% of the monthly salary plus 1.2 million won, compared with the previous year’s 150% of the monthly pay plus 3 million won.)

Q. 2021 EARNINGS OUTLOOK:

"We made a turnaround in the second half of last year and will likely post a sharp increase in profits this year."

Meanwhile, Chung received 5.9 billion won in salary and bonus in total from Hyundai Motor Co. and Hyundai Mobis Co. last year, up 15% from his incomes from the group a year earlier, according to a local media report. 
Write to Sun A Lee at suna@hankyung.com
Yeonhee Kim edited this article.