Hanjin Group Chairman Cho Won-tae is embroiled in controversy over whether raising his salary is fair, at a time when executives and employees are enduring pay cuts amid the coronavirus pandemic.
According to the 2020 business reports of Korean Air and Hanjin KAL, the group's holding company, Cho received about 3.1 billion won ($2.7 million) in salary last year ― 1.73 billion won from Korean Air and 1.37 billion won from Hanjin KAL. This represents a staggering increase of 63 percent as Cho received 354 million won more from Korean Air and 851 million won more from Hanjin KAL than in 2019. What's surprising is that his actual 2020 salary would have been much bigger because he returned half of his salary for the April-December period to the company as part of cost-cutting measures.
In acute contrast, the average salary of Korean Air employees fell 15.6 percent from 80.82 million won in 2019 to 68.18 million won last year. That's because most employees took part in rotational shifts, working one month and then taking leave the following month. Korean Air managed to post an operating profit of over 230 billion won last year as its personnel expenditure dropped from 1.56 trillion won to 1.27 trillion won.
Hanjin Group said Cho's salary rose because he was promoted from president to chairman of Hanjin KAL last year, but this is nothing more than a lame excuse. It's shameful that the head of a business empire raised his own salary markedly rather than leading by example for burden-sharing.
The government injected 1.2 trillion won in taxpayer money into Korean Air to shore up the ailing national flag carrier. Hanjin KAL also received 800 billion won to help Korean Air take over Asiana Airlines under the pretext of keeping the airline industry afloat. These bailouts were certainly not for the chairman himself. Returning his imprudently raised pay is the first thing Cho should do to show that he is qualified to lead the group.