Kim Yong-beom, vice chairman and CEO of Meritz Financial Group, exercised 990,000 stock options at the end of 2024, earning 81.4 billion won ($610 million). The payout made him the highest-paid executive in South Korea’s financial sector last year.
According to Meritz Financial Group’s 2024 annual report, Kim’s total compensation, including bonuses, amounted to 83.2 billion won. He exercised his stock options before their expiration deadline, cashing in 990,000 shares. Kim, who took over as CEO in 2014, was granted stock options for 1.23 million common shares in March 2015. While the number of exercisable shares declined due to share buybacks and cancellations, he utilized all remaining options by the end of 2024.
Other top executives at Meritz also benefited from stock options. Choi Hee-moon, vice chairman of Meritz Securities, received 27.8 billion won, while Kwon Tae-gil, CEO of Meritz Capital, secured 11 billion won. In total, the company’s three top executives earned a combined 120.2 billion won through stock options.
Stock options are a common compensation tool in the fast-growing tech sector but remain rare in the financial industry, where growth tends to be more gradual. Their effectiveness as an incentive depends heavily on stock price appreciation, as employees profit from the difference between the exercise price and the market price.
The introduction of stock options at Meritz Financial Group is attributed to Chairman Cho Jung-ho’s initiative. Kim previously said that while Cho first proposed the idea in 2013, executives were initially hesitant. However, in 2024, Cho pushed for their full implementation, leading to widespread adoption. The company’s emphasis on performance-based incentives also aligns with this approach. Kim has long advocated that “those who deliver strong results are the most loyal to the company.”
Meritz’s stock option program was designed not only as a reward for performance but also as a retention strategy for key executives. Kim’s options came with a five-year service requirement and could only be exercised between January 1, 2020, and December 31, 2024.
Large stock option exercises by executives often raise concerns in financial markets, as they can signal that insiders believe the stock has peaked. However, Kim’s case is seen differently, as he exercised his options ahead of their expiration. Additionally, Meritz Financial Group disclosed that in December 2024, Kim purchased an additional 50,000 company shares for around 5 billion won, bringing his total holdings to 400,000 shares (0.21% of outstanding shares).
Notably, Kim opted to receive the cash equivalent of his stock options rather than acquiring actual shares. This approach prevents the sudden influx of new shares into the market, which could depress the stock price.
Analysts view Kim’s payout as a reflection of Meritz Financial Group’s rapid growth over the past decade. Since Kim took over as CEO in 2014, Meritz’s net profit has grown nearly tenfold, from 237.6 billion won to 2.33 trillion won in 2024, while its stock price has surged sixteenfold to 104,000 won.
