Good performance in a recession… The oil refining industry again this year’s ‘performance pay party’

In contrast to the domestic industry’s recession last year, the oil refining industry, which recorded good performance, is holding a ‘performance bonus party’.

According to the industry on the 25th, GS Caltex announced in a notice sent to executives and employees the day before the Lunar New Year holidays, “We decided to pay 50% of the basic salary on January 27th as incentives for achieving business performance last year.” This is the same level as the performance bonus paid last year.

GS Caltex’s 4th Heavy Oil Cracking Facility. Provided by GS Caltex

GS Caltex’s consolidated operating profit for the first three quarters of last year was 4.0309 trillion won, up 186 percent from the same period last year. Previously, Hyundai Oilbank also paid incentives equivalent to 1,000% of the basic salary to its executives and employees. Hyundai Oilbank’s 2021 bonus was 600% of the base salary.

Hyundai Oilbank operates a performance-related bonus system. Last year, as the oil refining industry was favorable, the performance bonus increased as well. The company’s cumulative operating profit through the third quarter of last year was KRW 2.777 trillion, up 226% from the same period last year.

It is analyzed that the oil refining industry posted record-high performance thanks to high oil prices and ultra-strong refining margins that continued until the first half of last year.

In particular, the four domestic oil refiners, SK Innovation, S-Oil, GS Caltex, and Hyundai Oilbank, posted a surplus of over 12 trillion won in the first half of last year alone. In the first half alone, the company enjoyed an unprecedented boom that surpassed the record for the highest annual operating profit ever. Although profitability deteriorated in the second half of the year as oil prices fell, annual results are estimated to have been good.

SK Innovation and S-Oil have not yet decided on the scale of performance bonuses, but it is expected to be similar to last year. It is reported that SK Innovation paid 1,000% of the basic salary as performance bonus last year. S-Oil is also expected to receive the industry’s highest performance bonus.

Reporter Jung Jae-young [email protected]

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