‘Gosi pride’ for many years, then fulsome pay and perks

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‘Gosi pride’ for many years, then fulsome pay and perks


Why would a government official want to change his career by jumping into the financial sector? There are three very good reasons: Power, a big salary and relatively small responsibility.

Korean government officials possess the so-called “gosi pride,” referring to a self-esteem that comes from passing difficult civil servant examinations. The usual university student applicant spends two to three years preparing for the exams. Once the individuals pass, they get job security and a good pension after retirement. Their salaries may be lower than their peers working in the private sector, but most government officials stay in the public sector because of the hard-won gosi pride.

The Mofias ? a portmanteau of Ministry of Finance and the Mafia ? have it both ways. At the end of their civil servant career they leave the public sector for the private one.

High salaries are the biggest lure. In the private sector, chairmen of the four biggest financial groups ? KB, Shinhan, Hana and Woori ? receive salaries between 1 to 1.5 billion won ($865 thousand to $1,297 million), according to industry sources. The figures include short-term incentives. There are separate long-term incentives that they receive when they retire.

The chairmen are also given various allowances, including golf club membership and luxury sedans with drivers. High-ranking government officials receive less than half of what a chairman gets. A minister’s salary is 126 million won this year, according to data by the Ministry of Security and Public Administration. A vice minister receives 119 million won.

Chiefs of public financial corporations also receive higher salaries than government officials. Korea Finance Corporation President & CEO Chin Young-wook takes home 500 million won as salary, the top earner among heads of public corporations. Most CEOs of public companies receive 300 million won on average. In the private financial sector, the chairmen control more than 10 subsidiaries and are allowed to exercise power on personnel restructuring and decision-making, under the financial holding company law enacted in 2001.

Both chairmen of the private financial groups and CEOs of public financial corporations have relatively light responsibilities compared to their incomes, industry insiders say.

“In the private sector, even if a group chairmen make the decisions, it’s the CEOs of subsidiaries that are held accountable for failures,” said an insider who declined to be named.

Analysts point out that chairmen of financial groups may lack expertise in the area, but they can maintain their posts and make profits by operating commercial banks as usual.

“They don’t need to take risks or try to compete with each other because domestic commercial banks are operated under similar profit-making systems,” said a high-ranking government official on the condition of anonymity. “They, in fact, don’t need the government to butt in, and they have no duty to attend meetings convened by the financial authority.”

BY SONG SU-HYUN [ssh@joongang.co.kr]
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