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[Alpha Biz=(Chicago) Reporter Kim Jisun] According to the industry on the 30th, the LG Energy Solution labor union issued an internal notice on the same day, saying, "Despite the record-high performance that is updated every year, the performance bonus payment rate has been disastrously shattered and the company's one-sided logic that IRA subsidies cannot be reflected in performance bonus specifications can no longer be followed."
LG Energy Solutions held a briefing session for its executives and employees and announced that it has set this year's management performance at 340-380% of the basic salary and 362% of the overall average. Under the U.S. IRA, the Advanced Manufacturing Production Tax Credit (AMPC) will not be reflected as a performance indicator considering its high volatility.
LG Energy Solutions' performance-based pay last year was 870% of the highest base salary among LG Group affiliates and was paid up to 900% depending on performance. In 2022, an average of 450% of the basic salary was paid as a bonus. This year, performance-based bonuses have been reduced to less than half compared to the previous year.
This year's reduction in performance-based bonuses is attributed to poor performance due to slowing demand for electric vehicles, which are front-line industries. LG Energy Solutions achieved annual sales of 33.7455 trillion won and operating profit of 2.1632 trillion won last year. The figure is up 31.8 percent and 78.2 percent, respectively, from a year earlier.
However, its performance in the fourth quarter of last year was sluggish due to slowing global demand for electric vehicles and falling metal prices. Sales in the fourth quarter were 8.14 trillion won, down 6.3 percent year-on-year and 2.7 percent from the previous quarter. Operating profit (338.2 billion won) increased 42.5% year-on-year, but decreased 53.7% from the previous quarter. Excluding IRA-listed deductions (250.1 billion won) from operating profit, operating profit stood at 80 billion won in the fourth quarter.
The labor union is scheduled to hold a rally at the Ochang Energy Plant (factory) in Cheongju, North Chungcheong Province, in the morning of the 30th to denounce the unfair distribution. It also announced a letter of protest to Kim Dong-myung, the new CEO of LG Energy Solutions.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
