Public Corp Salary Jumped 5.1% in 2007

Last year, the average annual salary of the Korea Securities Depository ranked top among all public corporations, nearing 100 million won.

Among CEOs of public corporations, chairs of three state-run banks — the Korea Development Bank, the Export-Import Bank of Korea and the Industrial Bank of Korea — earned the highest annual salaries, as they also did in the previous year.

According to an analysis on the management of public corporations by the Ministry of Strategy and Finance on Sunday, last year`s average annual salary of the employees of 302 public corporations was 53.41 million won, which is 2.57 million won (5.1 percent) higher than that of 2006.

This growth rate in salary is far higher than two percent, the public sector ceiling proposed by the ministry (then Ministry of Planning and Budget) on salary increase in 2007 excluding incentives.

“The growth rate turned out to be high as the result of the high reflection of incentives that can be paid up to 500 percent,” explained the ministry. “We are investigating if any of them has violated the guideline.”

Out of all public corporations, the wages of the Korea Securities Depository, 96.77 million won, was the highest, with an increase of 9.8 percent. The average annual salary of the employees of the Korea Development Bank had been the highest in 2006, but in 2007 it was pushed down to the second rank with 92.96 million won. Among CEOs of public corporations, the annual salary of the KDB president ranked top at 612 million won. It dropped by 17.5 percent compared to the previous year, but still maintained the top rank. Following are the 2007 salaries of the presidents: the Export-Import Bank (568 million won), the Industrial Bank (558 million won), and KDB Capital Corp. (531 million won), all above 500 million won.

The average annual salary of all CEOs of public corporations in 2007 was 154 million won. The average annual salary of the CEOs of the 24 public corporations that are major candidates for privatization due to their strong commercial nature and weak public nature was 220 million won in 2007, an 11.4 percent rise from that of 2006.

The task promotion cost, often mentioned when appraising the slackness of management, was 24 million won on average. The task promotion cost of the president of the National Health Insurance Corporation was the highest, recording 116 million won, and those of the KDB, the Korea Workers` Compensation and Welfare Service, the Agency for Defense Development, the Financial Supervisory Service, the National Pension Corporation, and the Korea Consumer Agency were all above 70 million won.

Among 302 public corporations, 89 (29.5 percent) ran deficit last year. That is, their salaries were high, but performances weak. Those that showed large deficits were the Korea Credit Guarantee Fund (436.9 billion won), the Korea Rain Network Authority (319.7 billion won), the Kibo Technology Fund (316.4 billion won), the Korea Coal Corporation (92.9 billion won), and the Korea Housing Finance Corporation (81.6 billion won).

legman@donga.com