KRAFTON

Our compensation policy is determined by a Compensation Committee composed entirely of outside directors and may be subject to some changes during the final approval process by the Board of Directors.
The compensation payment standards and details for each director according to ‘2024 Compensation Policy’ are as follows:

CEO

• • • The CEO’s compensation, which consists of a base salary and incentives (both short-term and long-term incentives), is determined by the Compensation Committee, composed entirely of outside directors, within the limit of director compensation resolved at the Shareholders’ Meeting, and is finally approved by the Board of Directors.
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    Under the direction of ‘Pay for Performance’, the Compensation Committee has established a compensation policy that aligns the company’s mid-to-long-term performance with the CEO’s compensation. The criteria for each compensation item for the CEO are as follows:

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      Base salary

      • – The annual amount resolved by the Compensation Committee and the Board of Directors, considering the value of the duties performed and the contribution to the company, within the limit of director compensation resolved at the Shareholders’ Meeting, is paid in monthly installments of 1/12th.
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      Short-term incentives

      • – Cash compensation for short-term performance
      • – The Compensation Committee and the Board of Directors resolve to pay incentives for the performance of the previous year, considering both quantitative indicators composed of operating profit and other metrics, and qualitative indicators composed of business execution performance, company and organizational task achievement, and contribution levels.
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      Long-term incentives

      • – Compensation in the form of stock or cash linked to stock value for long-term performance
      • – As part of a stock price-linked long-term incentives plan, compensation is granted in the form of Restricted Stock Units (RSUs). The allocation consists of Time-based RSUs, which are granted for continuous employment until the expiration date (20%), and Performance-based RSUs, where the amount paid is determined based on performance indicators (executing the “Scale-up the Creative” strategy (40%), operating profit (20%), and relative stock price increase (20%)). The proportion of each item is calculated based on the maximum number of shares that can be granted. RSUs granted in 2024 will be paid out two years later.

Inside director(Chairman of the Board)

• • The compensation for the inside director (Chairman of the Board), which consists of a base salary and incentives (long-term incentives), is determined by the Compensation Committee, composed entirely of outside directors, within the limit of director compensation resolved at the Shareholders’ Meeting, and is finally approved by the Board of Directors.
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  The Compensation Committee has restructured the compensation system for the inside director (Chairman of the Board) by differentiating the compensation according to the role of the inside director (Chairman of the Board) and introducing long-term incentives. The criteria for each compensation item for the inside director (Chairman of the Board) are as follows:

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    Base salary

    • – The annual amount resolved by the Compensation Committee and the Board of Directors, considering the expected role and value of the position comprehensively, within the limit of director compensation resolved at the Shareholders’ Meeting, is paid in monthly installments of 1/12th.
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    Long-term incentives

    • – Compensation in the form of stock or cash linked to stock value for long-term performance
    • – As part of a stock price-linked long-term incentives plan, compensation is granted in the form of Restricted Stock Units (RSUs). The allocation consists of Time-based RSUs, which are granted for continuous employment until the expiration date (1%), and Performance-based RSUs, where the amount paid is determined based on performance indicators (tiered payment for a minimum market capitalization of at least KRW 30 trillion (97%), and relative stock price increase (2%)). The proportion of each item is calculated based on the maximum number of shares that can be granted. RSUs granted in 2024 will be paid out two years later or upon achievement of targets.

Outside directors

• • The compensation for the outside directors, which consists of a base salary and incentives (long-term incentives), is determined by the Compensation Committee, composed entirely of outside directors, within the limit of director compensation resolved at the Shareholders’ Meeting, and is finally approved by the Board of Directors.
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  The Compensation Committee has restructured the compensation system for the outside directors to ensure their independence and transparency, and to align their compensation with the company’s long-term vision achievement. This restructuring includes the abolition of short-term incentives and the introduction of long-term incentives. The criteria for each compensation item for the outside directors are as follows:

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    Base salary

    • – The annual amount resolved by the Compensation Committee and the Board of Directors, considering the position, responsibilities, expertise, and the overall business environment of the company comprehensively, within the limit of director compensation resolved at the Shareholders’ Meeting, is paid in quarterly installments of 1/4th.
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    Long-term incentives

    • – Compensation in the form of stock or cash linked to stock value for long-term performance
    • – As part of a stock price-linked long-term incentives plan, compensation is granted in the form of Restricted Stock Units (RSUs). The allocation consists of Time-based RSUs, which are granted for continuous employment until the expiration date (33%), and Performance-based RSUs, where the amount paid is determined based on performance indicators (relative stock price increase (67%)). The proportion of each item is calculated based on the maximum number of shares that can be granted. RSUs granted in 2024 will be paid out either two or three years later, depending on the appointment term.
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    Audit Committee Members Allowance

    • – Outside directors serving as Audit Committee members are paid an allowance, resolved by the Compensation Committee and the Board of Directors, considering their scope of work and level of responsibility, to ensure independence and diligence, in addition to their base salary.