CEOs ‘lax management’ criticized

Home > Business > Economy

print dictionary print

CEOs ‘lax management’ criticized

Trade Minister Yoon Sang-jick has criticized some public companies for “lax corporate management,” which he doesn’t want to get in the way of the government’s plans to create up to 10,000 entry-level jobs over the next two years.

On Thursday two ministries met with public enterprise CEOs to push them to finish implementing the peak wage system by October at the latest after it was discovered that only eight state-run companies have introduced the scheme.

“The government’s job creation initiatives shouldn’t be spoiled [by] lax corporate management,” said Yoon at the meeting. “The CEOs should make sure to carry out the initiatives based on the principle of public sector reformation.”

The Ministry of Trade, Industry and Energy, one of the largest government arms in numbers of owned state-run companies, said it will push its 40 public companies to implement the system by the end of October.

The peak wage system guarantees employment status for all senior-level employees in exchange for a gradual cut in their wages during the last three to five years leading up to their retirements at age 60. The specific format and wage-cut rate of the peak wage system differ at each company, depending on how labor and management’s negotiations reach agreement.

Of 40 enterprises, nine of them - including Korea Power Exchange, Korea Trade-Investment Promotion Agency and four power generation companies - have completed the implementation as of Thursday. Another 10 reported they would complete
it by September.

The ministry also pushed the CEOs to use the peak wage system to create up to 10,000 entry-level jobs for the next two years.

Under the initiative, the 40 public enterprises will directly hire 5,000 young people over the two years to replace the existing retirees who leave their work after the peak wage system settles down. Another 5,000 will be hired during the same period for new business projects.

Minister of Agriculture, Food and Rural Affairs Lee Dong-phil also met CEOs of 10 agriculture and food-related public enterprises on Thursday.

Of 10 enterprises under the ministry, only one has finished negotiations with the union to implement the
system.

Negotiations are still ongoing at the remainder of the enterprises or have confirmed the system’s rough draft to extend the retirement age to 60, from the current average age of 58.


BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]

More in Economy

WTO rules in favor of Korea in dispute over U.S. tariffs

Public sector job growth outpaces private sector growth

Exports up 10.6 percent in first 20 days of 2021

Down with the Cptpp!

Biden presidency good news, bad news for businesses

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now