Korea First Again Rocks Traditional Ways

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Korea First Again Rocks Traditional Ways

Korea First Bank is drawing criticism from the banking industry for its plan to adopt a stock option program for its management, including Wilfred Y. Horie, the bank president.

It recently notified the Korea Deposit Insurance Corp. and the Financial Supervisory Comission that it will put the stock option plan to stockholders at a meeting slated for March 16.

Including Mr. Horie, bank executives are expected to receive options to purchase a total of 400,000 shares of the bank at an exercise price of 6,000 won ($4.74) to 7,000 won per share. Mr. Horie will receive 100,000 options.

"If bank shares resume trading, the price will shoot up to 20,000 won per share because the government wiped out the bank's bad debts with restructuring funds," a banking industry official said. "The stock option program will generate hefty gains for bank management when they exercise their options in three years."

The government agencies also say that bank management cannot take sole credit for earnings of 300 billion won in 1999 when the govenrment bought out the bank's non-performing loans.

Bank officials say restructuring and the bailout's effects are over; management prowess will determine stock values.


by Oh Jung-hee

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