Financial group heads to pay back 30% of salary

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Financial group heads to pay back 30% of salary

The chairmen of three major financial groups - Shinhan, Hana and KB Financial - have pledged to return 30 percent of their salary back to their companies to hire more people within the groups and their affiliates.

“We decided to participate in social responsibility of job creation for youths and economic stimulation in today’s increasingly challenging environment of low growth,” the chairmen of the three groups said in a joint statement.

“We decided to take the lead and return 30 percent of our salary [back to the company]. As for CEOs and executives at our affiliate firms, we will discuss internally how much of a cut they will take,” the statement said.

The returned salaries will be used to hire more interns, entry-level employees, as well as experienced hires and career-gap women, according to officials at the financial groups.

“Details will be set within this month, but we think the CEOs would probably return around 20 percent of their salary, and senior executives 10 percent,” said a KB Financial Group

“We do not know the details, but [affiliate CEOs and senior executives] will probably follow the initiatives taken up by the chairman,” said a Shinhan Financial Group official.

On the back of the current administration’s stance on job creation, Korean companies in recent weeks announced a string of plans to hire more people.

For this year, Shinhan Financial Group, Hana Financial Group and KB Financial Group said they planned to hire 1,500, 1,200 and 1,580 new employees respectively. The number of new hires for Hana and KB would be about an 80 percent increase, compared with the previous year.

The total amount of money being returned and the time frame of the initiative was not revealed, although the initiatives are expected to be large enough to hire 300 new employees.

This is the first time the chairmen of the country’s top three financial groups came together to support job creation, though the groups have individually taken similar action.

From November 2008, after the Lehman fallout, until December 2011, the Shinhan Financial Group chairman and the heads of its banking and financial affiliates gave 20 to 30 percent of their pay back to their firms.

KB Financial Group cut pay for executives by 10 to 15 percent in August 2010, while Hana Financial Group in 2013 cut the group chairman’s pay by 30 percent, the CEO’s salary by 20 percent and senior executives by 10 percent.

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