Public corporations snub pay guidelineFive public corporations were found violating the government’s guideline on salaries, paying employees more despite their debt-ridden finances.
According to a report by lawmaker Lee Nak-yon of the Democratic Party, Korea National Oil Corporation, Korea Coal Corporation, Korea Radioactive Waste Agency, Korea Student Aid Foundation and Korea Communications Agency paid employees double the national average salary last year.
The total debt of the five institutions is 29.1 trillion won ($26.4 billion).
The lawmaker’s report revealed Korea Coal Corporation’s total labor costs rose 7.86 percent last year from 2011. The Korea Student Aid Foundation and Korea Communications Agency’s increased by about 5 percent, while Korea National Oil Corporation’s climbed 3.93 percent.
The average annual salaries were 73 million won at the Korea Radioactive Waste Agency, 68 million won at the Korea Student Aid Foundation, 53 million won at Korea National Oil Corporation and Korea Communications Agency, and 51 million won at Korea Coal Corporation.
The national average salary was 28 million won per year. Korea Coal Corporation violated the government’s guideline on wage growth of public institutions for the past six years, according to the report. Lee said the company intentionally created various incentives to disguise increasing wages.
The government’s guideline for annual salary growth at public corporations is 3.9 percent.
The state-run coal producer, which has as much as 1.4 trillion won in debt, received an “E,” the lowest grade, in the latest government evaluation on performances of public institutions.
Lee found the other companies’ labor costs surged as they paid out significant amounts in extra rewards.
Korea National Oil Corporation is shouldered with 17.9 trillion won debt, while Korea Student Aid Foundation has 8.3 trillion won debt.
“It is proof that these public companies are still in lax management,” Lee said. “The government needs to keep in check debt-ridden public institutions’ increasing labor costs.”
In response to growing criticism of public institutions for lax management practices, the government announced a comprehensive plan to overhaul the public sector with stricter rules in July.
The Ministry of Strategy and Finance said debt at public entities is growing at an alarming pace and represents a major burden on the national economy.
The total debt of Korea’s 295 public institutes, corporations and quasi-governmental organizations shot up from 290 trillion won in 2008 to 493 trillion won last year.
BY Song Su-hyun [email@example.com]