Posted January. 07, 2010 09:03,
Forty-one financial institutions from the end of the month must pay annual bonuses to its executives and employees in installments over a four-year period, financial authorities announced yesterday.
This is according to a new compensation rule set by the Financial Services Commission and the Financial Supervisory Service.
All 18 domestic commercial banks, seven financial holding companies, 10 brokerages with assets of five trillion won (4.4 billion U.S. dollars) or more, and six insurance companies with assets of 10 trillion won (8.8 billion U.S. dollars) or more must pay bonuses in installments.
Under the rule, the institutions must pay 40 percent of bonuses to executives and certain employees this year and the remaining 60 percent in installments over the next three years or in a lump sum after three years. They can adjust the amount paid in a lump sum or installments within the range of 20 percent of the bonuses.
In addition, half or more of the bonuses must be paid out in the form of stocks or stock options. For regular employees, those dealing in foreign exchange or securities transactions are subject to the new rules.
Each financial institution must also set up a compensation committee under its board of directors and make public disclosures of bonuses within three months after they are paid.