Go to contents

Wage Cuts Set for Public Firm CEOs

Posted April. 17, 2008 04:48,   


President Lee Myung-bak has ordered a reorganization of the wage structure for state-run organizations, citing public criticism that the heads of certain public firms are earning excessive income relative to their workload or performance.

The government will discuss with the pro-government Grand National Party revising laws on running state-owned organizations, and seek to set wages for public corporation executives at reasonable levels after reshuffling their workforce.

A high-ranking official said yesterday, “The president recently complained over how the heads of certain state-run financial firms earn several hundreds of millions of won a year when they take no risks like foreign investment banks and solely depend on giving credit. The government will set the wage levels of relevant organizations based on management assessment.”

A new “wage arrangement” committee of private experts, including accountants under the Steering Committee of State-run Organizations led by the finance minister, will set pay for public executives.

Such wages have been determined by the boards of directors of each organization and the steering committee, inviting criticism of a lack of effective measures to control reckless management of state-run firms.

The government is known to have targeted first state-run financial firms that are considered “dream workplaces” with high job security and excessive wages.

The Strategy and Finance Ministry said the governor of the Korea Development Bank received the highest salary among public executives last year at 742.14 million won. The figure included basic wage, incentives and benefits but not overtime pay, compensation for unused annual and monthly leaves and business development expenses.

The head of Industrial Bank of Korea earned 722.89 million won; that of the Export-Import Bank of Korea 680 million won; that of KDB Capital 529.52 million won and that of Korea Investment Corporation 480 million won.