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Last year, it was confirmed that the chiefs of the four major commercial banks received compensation of 1 billion to 1.7 billion won.
According to the ‘2020 Business Report’ announced on the 18th by KB Kookmin, Shinhan, Hana, and Woori Banks, the total remuneration of KB Kookmin Bank President Huh In last year was 1.72 billion won. 650 million won in salary and 1,074 billion won in bonuses were paid.
An official from KB Kookmin Bank explained that the annual salary of Chairman Huh has almost doubled from 2019 (89 million won), “because the accumulated long-term performance compensation was paid as the length of the executive tenure was prolonged.”
In the case of Shinhan Bank President Jin Ok-dong, he received 1.13 billion won. Contrary to Chairman Huh, his salary (820 million won) was about twice the bonus (380 million won).
Hana Bank President Ji Sung-gyu’s total remuneration last year was 1,022 billion won. In addition to the salary of 690 million won, it received a bonus of 322 million won reflecting the 2019 management performance.
Kwon Kwang-seok, head of Woori Bank, received a total of 553 million won, up to 495 million won in salary and 55 million won in bonuses last year.
In the case of Chairman Kwon, since he took office in March last year, he is not eligible for long-term bonuses.
Tae-Seung Son Woori Financial Group[316140] The president’s annual salary was 1.1 billion won, an increase of 338 million won from the previous year (760 million won). It is the amount of 800 million won in salary plus a bonus of 290 million won.
Son’s remuneration last year was less than that of KB Financial Group Chairman Yoon Jong-gyu (2.66 billion won), Kim Jung-tae, Hana Financial Group Chairman (2.635 billion won), and Shinhan Financial Group Chairman Cho Yong-byeong (1.3 billion won).
In addition, KB Kookmin Bank announced in its business report that it would allocate KRW 1.516 trillion of all profits last year. The dividend payout ratio (dividend/net profit) is 65.98%, more than twice that of 2019 (30.1%).
An official from KB Kookmin Bank explained, “This is because we implemented interim dividends to prepare financial resources for KB Financial Group’s acquisition of Prudential Life.”
Shinhan Bank’s dividend payout ratio last year was 37.06% (total dividend amount 770 billion won), which is rather lower than in 2019 (38.21%).
In the case of Hana Bank, it paid a dividend of KRW 7147 billion, which finally recorded a dividend payout ratio of 35.56%.
Last year, Woori Bank’s dividend payout ratio was 49.9% and the total dividend amount was 680.2 billion won. It has maintained a dividend payout ratio of over 40% for the second consecutive year following 44.9% in 2019.
An official at Woori Bank explained that the reason why the dividend payout ratio is relatively higher than that of other banks is “because the bank’s dependence on dividends is high since the establishment of the holding company.”
Since most commercial banks are wholly owned subsidiaries of financial holdings, all dividends from banks are paid to financial holdings. Therefore, it is common to adjust the dividend payout ratio according to the financial demand of the landlord.
A commercial bank official said, “If there is no impact on soundness, the dividend payout ratio of banks to landlords is usually determined at a level of 30% or more every year.” It is a little different from the dividend payout ratio of banks to landlords,” he said.
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