Salary for KDB Head to Be Halved
By Kim Jae-kyoung
Staff Reporter
Heads of state-run companies will face steep cuts in salaries as a result of the government's efforts to restructure public firms into more efficient and profit-oriented ones.
In particular, the new head of the Korea Development Bank (KDB) will see his salary almost halved.
The Ministry of Strategy and Finance announced Thursday that in an attempt to lower wages for public company CEOs, the base annual salary for all state-run firms will be set at 108 million won, equivalent to that of a state vice minister.
Heads of state-run financial institutions, including banks, Korea Credit Guarantee Fund and KIBO Technology Fund, will receive a base annual salary of 161 million won, equal to 150 percent of that of a vice minister salary.
Those leading state-run firms with over 50 trillion won in assets and over 20,000 employees will earn 110 percent of a vice minister paycheck, which is estimated at 118 million won.
The base annual salary for auditors of state-run companies will be set at a level equivalent to 80 percent of their CEOs.
Performance-based bonuses will range from 100 to 200 percent of the base salary.
With the new salary scheme, KDB governor and presidents of Industrial Bank of Korea (IBK) and Export-Import Bank of Korea (Eximbank) will see their base salary fall by 42.4 percent, 38.3 percent and 32.1 percent, respectively.
The ministry said that the average base annual payment for the three public bank CEOs is about 325 million won.
CEOs appointed after June 1 will be paid under the new compensation scheme.
``We decided to reform the compensation structure for heads and auditors of state-run companies as many careless management cases have been highlighted,'' a ministry official said.
``Since public companies are not as exposed to the risks associated with management and competition as private companies, it is not reasonable to pay them the current high level of salary '' he added.