Disclosure of’Governance Structure and Remuneration System Annual Report’
Did KB employees’inclusive’ increase by 14 million won?
Excluding executives, the’de facto’ salary level is the same
Shinhan freezes chairman’s compensation Employee increase
However, all reductions except for registered executives or more
[천지일보=김누리 기자] Yoon Jong-gyu, chairman of KB Financial Group, received 2.6 billion won in salary last year and sat down as the highest annual salary of the Big 3 Financial Group. It is analyzed that the annual salaries of executives and above of KB and Hana Financial Group, excluding Shinhan Financial Group, rose, but received high salaries through incentive pay as the employee’s salary decreased to the same as the previous year.
On the 8th, KB, Shinhan, and Hana Financial Group announced the’Governance Structure and Compensation System Annual Report’ and revealed the compensation system for employees. As a result, it was found that among the big three financial holding companies, Chairman Yoon Jong-gyu received the highest amount of remuneration, receiving 2.66 billion won, including 1.86 billion won in bonuses. The annual salary from 1.59 billion won in 2019 has increased by 1.07 billion won.
This is due to a large increase in performance. KB Financial Group said in a public announcement that Chairman Yoon received more than twice the amount of incentives compared to the previous year. Last year, the company recorded a record-high performance with net income of 3.455 trillion won, and it was received as a reward for retaking its position as a leading bank. In addition, the accumulated incentives accumulated over the sixth year in office have been deferred, resulting in a significant increase in salaries.
Hana Financial Group Chairman Kim Jeong-tae, who had the highest annual salary among the chairmen of the holding company, received 2.63 billion won, including 1.79 billion won in bonuses last year, and received 30 million won lower pay than Chairman Yoon. This is an increase of 140 million won from 2019.
Yong-byeong Cho, chairman of Shinhan Financial Group, received a remuneration of 1.3 billion won, including incentives of 500 million won in 2020 alone. This is at a level with no difference compared to the previous year in both the total amount and the amount of incentives.
In addition to Chairman Yoon, the average pay for executives of KB Financial Group also increased significantly. The average annual salary per unregistered executive was 490 million won, an increase of more than 110 million won from the previous year. However, the annual salary of employees excluding executives was 133 million won, the same as the previous year. The salary increase based on the highest performance ever appeared only for executives and above.
At the time of disclosure, the average salary of employees was 166 million won, an increase of 14 million won compared to the previous year. However, excluding executives, the employee’s annual salary level was the same as the previous year.
In the case of Shinhan Financial Group, whose annual salary was frozen, the average salary increase per employee was higher than that of executives. Shinhan’s average annual salary for unregistered executives was disclosed at 317 million won, up 5.6% from the previous year. The number of employees, excluding executives, rose by 7.2% to 134 million won.
Excluding Chairman Kim, outside directors and non-executive executives, Hana Financial Group’s average annual salary declined at the same time. The average annual salary for unregistered executives at Hana Financial Group decreased from 260 million won in 2019 to 154 million won. The average salary per employee also decreased from 114 million won to 115 million won.
Banks have lowered their dividend payout ratio as the financial authorities have recommended lowering the dividend payout ratio to 20% of net profit to overcome the Corona 19 crisis. This is because the profits of investors of financial holding companies decreased, while the money taken by executives and employees increased.
In February, KB Financial Group and Hana Financial Group recorded record-breaking performances, but only distributed 20% of last year’s net profit, recording total dividends of 6897 billion won and 539.4 billion won. This is a reduction in the total dividend amount of 100 billion to 200 billion won compared to the previous year, respectively.
On the other hand, Shinhan Financial Group, the only one that passed the “L-shaped” stress test of the Financial Supervisory Service, reduced its dividend payout ratio to 22.7%, slightly exceeding 20% of the dividend recommendation.
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