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Korea opens Pandora’s box of exec pay
Publication Date : 02-04-2014
The public disclosure of executive pay at Korean conglomerates is drawing both criticism and skepticism over whether those listed among high payrolls are truly worth what they earn.
Some may feel envy toward executives or board members.
But public criticism is mounting, especially against conglomerates whose owners or executives have been found guilty of wrongdoing.
SK chairman Chey Tae-won, who was imprisoned for embezzlement, reportedly received an income of some 30 billion won last year, the highest among Korean executives who had to disclose salaries surpassing more than 500 million won in annual company audit reports.
Chey’s disclosed earnings immediately backfired, leading SK Group to explain that the chairman, who has recently relinquished his board seats at key SK subsidiaries and affiliates, only got 9 billion won in salary last year.
It added that Chey will not receive any pay this year, saying that he has left the group with almost empty pockets.
Korea’s third-largest conglomerate noted that Chey paid 12 billion won for income tax, pension and insurance, and returned his 20 billion won bonus last year.
Chey announced last month through the group that he will give up his board seats at SK Holdings, SK Innovation, SK C&C and SK Hynix, after he was sentenced to four years in prison.
Hanwha Group chairman Kim Seung-yeon, who reported an annual income of about 33 billion won last year, also drew criticism.
The public showed discontent toward the high salary of the business tycoon, who has had run-ins with the law since 2007. Kim was sentenced to four years in jail for embezzlement and breach of trust in 2012. He recently left for the US for medical treatment.
Hanwha Group, however, said he was only paid 13.1 billion won a year after returning 20 billion won to the company.
Separate data by Chaebul.com, a website that provides information on family-run conglomerates, showed that executives of the country’s top 10 business groups received an average paycheck of 1.04 billion won last year, far more than the 75.8 million won average salaries of their employees.
Samsung Group, Korea’s largest conglomerate posted the widest paycheck gap, with executives being compensated an average wage of 1.6 billion won, compared with the 86.8 million won for employees. - With news reports