Official and executive salaries are reduced as country and companies struggle

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Official and executive salaries are reduced as country and companies struggle

Government and corporate leaders are cutting their salaries in response to the coronavirus pandemic.

The former are doing so as a sort of penance, taking responsibility for the high number of cases in Korea. The latter are accepting a cut as their companies struggle and need all the help they can get.

The government announced earlier this week that ministers, vice ministers and other higher-ranking officials will return 30 percent of their salaries for the next four months to share the pain being felt by most Koreans.

President Moon Jae-in and Prime Minister Chung Sye-kyun started the movement, which has been quickly expanded to municipal and provincial governments.

By Wednesday afternoon, dozens of local governments, including North Gyeongsang, South Gyeongsang, Daegu, Daejeon and North Chungcheong, and related agencies also joined the trend and announced they will pay back up to 30 percent of their monthly salaries. Political parties have joined the campaign and are returning at least 3 billion won ($2.4 million) over the next four months.

Politicians and government officials have been facing growing pressure from the public, which called for them to return some of their pay to take responsibility from the Covid-19 crisis. A Blue House petition posted two weeks ago that received more than 360,000 signatures asked representatives to repent and help the country in a difficult crisis.

Critics claim the move is little more than a publicity stunt aimed at winning votes ahead of the April 15 general elections, but as the total collected is expected to break 10 billion won, the amount could be significant and make a difference.

Executives of state-run Korea Electric Power Corporation and its affiliates are returning 10 percent of their annual salaries. Korea Hydro & Nuclear Power is cutting 30 percent of monthly salaries for its executives for four months starting March.

For corporations, voluntary salary cuts are aimed at saving their companies, as the coronavirus outbreak around the globe has hindered business activities across industries and has already resulted in significant losses.

Korean Air Lines announced Wednesday that all of its around 80 executives, including Cho Won-tae, chairman of Hanjin KAL, Hanjin Group and Korean Air Lines, will return up to 50 percent of their monthly salaries.

Asiana Airlines announced a day earlier that all of its executives will return 60 percent of their salaries, while all of its 10,500 employees go on unpaid leave for 15 days each in April. Low-cost carriers are also cutting up to 30 percent of salaries for executives.

The carriers have been under significant financial pressure from a sharp decline in air travel since Jan. 20, when Korea reported its first case of Covid-19.

As refineries suffer from reduced profit from a sharp fall in oil prices, Hyundai Oilbank announced Tuesday all of its executives will return 20 percent of their salaries while the company enters emergency management.

Hotel Lotte executives are paying back 10 percent of their salaries, while domestic fashion company LF is having its high-ranking executives return 30 percent of their salaries for March.

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