Summary of Key Points
In this year’s semi-annual compensation rankings for the heads of South Korean chaebols (corporate conglomerates), Park Jeong-won, the chairman of Doosan Group, topped the list with a salary of 218 million yuan (for half a year). This was mainly due to the redemption of restricted stocks granted three years ago, which led to a 12-fold increase in the company’s stock price driven by the AI boom. Lee Jae-yong of Samsung received a “zero salary,” which was a result of public opinion pressure (from his bribery case in 2017) and tax optimization strategies. However, his actual wealth comes from hidden sources such as stock dividends and appreciation in his holdings. Chaebols use methods like cross-shareholding and related-party transactions to control vast conglomerates with a small amount of capital, a pattern that has exacerbated South Korea’s wealth gap. Recently, Samsung’s large-scale dividend plan has once again raised concerns about the wealth disparity.
1. Park Jeong-won’s High Salary: Not from a Regular Paycheck, but from a 12-Fold Stock Gain
Park Jeong-won’s high salary did not come from a regular monthly payment; instead, it was from the redemption of restricted stocks granted by the company three years ago. Simply put, in 2023, Doosan gave him a batch of stocks with the condition that they could only be sold after three years. By February this year, the stock price had risen from around 90,000 Korean won per share three years ago to 1.165 million won per share (a 12-fold increase), generating a profit of 37.59 billion Korean won from the sale of these stocks, accounting for 90% of his total compensation.
Why did the stock price rise so sharply? It’s because of the AI boom—AI requires a large amount of energy, and Doosan, which operates in energy (nuclear power equipment, gas turbines), and heavy industry, happened to be in the right position to benefit from the “nuclear power revival + increased demand for AI-related services,” leading to a surge in its business and a corresponding rise in its stock price.
2. Lee Jae-yong’s “Zero Salary”: Apparently No Money, but Actually a Strategy to Avoid Taxes and Public Opinion
Lee Jae-yong is not really receiving no salary; it’s just that his recorded salary is zero. There are two reasons for this:
1. Public Opinion Pressure: In 2017, he was convicted of bribing Park Geun-hye, and South Koreans criticized the chaebols for being too arrogant. As a result, he was forced to publicly declare that he would no longer receive a salary, a decision that has continued to this day.
2. Tax Optimization: Salaries are subject to high taxes, while taxes on stock dividends and appreciation in stock holdings are lower. His real wealth is hidden in his stock holdings. According to Forbes’ 2025 list of South Korea’s richest people, he is ranked second with a fortune of 7.8 billion US dollars, which is much higher than his recorded salary.
3. The “Hidden Income” of Chaebols: Salaries Are Just the Tip of the Iceberg
The recorded salaries of chaebol leaders are not the main source of their income. The real money comes from the following:
- Stock Dividends: Chaebol families hold a large portion of the company’s shares and receive dividends that are several times higher than their salaries each year.
- Appreciation in Stock Holdings: As company stock prices rise, the value of their holdings increases (as seen in Park Jeong-won’s case).
- Cross-Shareholding: Chaebols use complex structures to control companies, allowing them to have significant influence with a small amount of capital. For example, Lee Jae-yong’s family controls companies through Samsung C&T, Samsung Life, and Samsung Electronics, enabling them to make decisions with a small stake while preventing external acquisitions and influencing the entire conglomerate.
- Unlisted Assets: Real estate, artworks, and shares in unlisted companies are not included in the compensation disclosures but are often valued much higher than those of listed companies.
4. The Chaebol Model: A Driver of South Korea’s Wealth Gap
This method of wealth accumulation has widened the wealth gap in South Korea:
- Chaebol families use cross-shareholding and dividends to accumulate wealth, while ordinary people receive fixed salaries and struggle to benefit from economic growth.
- Despite public calls for chaebol reform, the South Korean economy is closely tied to these conglomerates (for example, Samsung contributes 20% to South Korea’s GDP), making reform difficult to implement.
- Recently, Samsung’s announcement of a shareholder return plan worth 90-110 trillion Korean won (the largest in South Korean history) has further raised concerns that the wealth will be distributed to the chaebol’s major shareholders, potentially exacerbating the wealth gap.
5. The Government’s Response: Trying to Share the AI Benefits for the Future
Faced with the wealth created by the AI boom, the South Korean government is taking action. In July this year, it announced the establishment of a “Future Response Fund” to collect additional taxes from the AI industry and invest them in future industries (such as technology research and development and job training) in hopes of benefiting ordinary citizens and alleviating the wealth gap. However, the effectiveness of this initiative depends on whether it can break the chaebols’ monopolies.
In essence, this news highlights that the “recorded salaries” of South Korean chaebols are merely a facade, and their real wealth is hidden in complex equity structures and hidden income sources. This model allows a few individuals to become increasingly wealthy, while ordinary people face greater difficulties. The road to reform is still long.