By Kang Seung-woo
Staff Reporter
Commercial banks will look to a three-year installment system regarding the payment of performance-based incentives to employees.
This measure is aimed at preventing them from taking excessive risks for immediate, large-scale compensation.
The banks also are expected to abolish stock options being given out, adopting a variety of reward systems that are closer tied with long-term performances.
KB Bank is leading the way.
Pertinent regulations have been revised so, starting this year, its executives and dealers will receive 50 to 60 percent of their performance incentives by installments over three years.
More than half of the incentives that remain outstanding will be given in form of stock grants with the aim of tying their incentives with the bottom line.
Woori Bank has gone one step further.
Under the new rule, a CEO will get 40 percent of his performance incentives a year later, with the remaining 60 percent to be given over three years starting in the fourth year.
Other executives and dealers will be given 60 percent in a lump sum, with the rest to be paid over three years.
Shinhan Bank is considering scrapping stock options shifting to stock grants.
The Industrial Bank of Korea (IBK) will award incentives based on the previous year's management evaluation. The president will receive incentives from 0 to 200 percent and the vice president from 0 to 150 percent.
``The reason for the retooling of the system is aimed at adjusting the incentives with a longer-term performance,'' a bank official.