FSS statistics show top executives raking it in
But it turns out that some top management have also pocketed more than 10 billion won ($9.2 million) in retirement pay.
Corporate filings registered with the Financial Supervisory Service showed that Hanwha Group Chairman Kim Seung-youn took home nearly 14.4 billion won in 2014 as retirement pay from four of the conglomerates’ affiliates - Hanwha Corporation, Hanwha Engineering & Construction, Hanwha Chemical and Hanwha Galleria.
The chairman stepped down as a registered executive of the affiliates on Feb. 18, after being sentenced to probation for illicit business practices.
“We calculate executive retirement pay according to our company’s regulations,” said a Hanwha official.
Hyundai Motor Group Chairman Chung Mong-koo stepped down in March 2014 from an executive post at Hyundai Steel. He took home 10.8 billion won.
Eight top executives each received more than 3 billion won on their retirement.
Retirement pay is calculated by incorporating an executive’s average monthly salary with the years that they have worked, which is then multiplied by a certain rate.
That rate grows according to the executive’s company rank, substantially increasing the size of retirement pay for top-level executives.
The retirement payment process is legally valid; by local law, pay is to be decided according to the company’s own regulations and approved by its shareholders.
But most companies do not submit to their shareholders information about how much individual executives will receive in annual salaries, bonuses and retirement pay. Instead, the companies report the total amount that will be provided to all their executives, including outside directors.
Some argue that the calculation applied to the retirement pay of executives should be the same as those applied to employees.
In response, a conglomerate official said executives aren’t equal with employees, because executives can be sacked at any time when the company performs poorly.
“We apply the retirement regulation factoring in such circumstances,” the official said.
BY SOHN HAE-YONG [firstname.lastname@example.org]