S. Korean financial firms pay handsome salaries to executives in 2015 despite disappointing earnings

Salaries paid to executives of South Korea’s financial companies have increased last year from a year earlier despite a fall in the companies’ profits, according to the Financial Supervisory Service (FSS) on Thursday.

Chung Tae-young, vice chairman of Hyundai Card Co., was the highest-paid executive in the Korean financial circle in 2015 with his paycheck reaching 1.74 billion won ($1.52 million) in total, according to the company's disclosure to the FSS. His annual compensation increased 12.4 percent from the previous year’s 1.55 billion won, while his performance-based bonus rose from 316 million won to 454 million won. The company’s net profit declined 16.4 percent from 223.5 billion won in 2014 to 186.8 billion won in 2015, but it has paid Chung such a handsome package to reflect his performance in 2014 that met the management’s target, according to Hyundai Card.

Annual salary of Won Gee-chan, CEO of Samsung Card Co., also jumped 10.4 percent year-on-year to reach 1.35 billion won last year, but the company’s net profit fell from 656.0 billion won to 333.7 billion won over the same period. The company has decided to pay him the compensation after taking account of the fact that it raked in 425.7 billion won in pre-tax profit in 2015 under the management and leadership of CEO Won despite tough business coniditions, according to the company’s statement.

CEOs of insurance units of Samsung Group also saw their paychecks increase despite disappointing earnings results. Samsung Life Insurance Co. President and CEO Kim Chang-soo received 1.73 billion won in 2015, up 12.8 percent from the previous year. During the same period, the life insurer’s net profit declined 9.5 percent. Ahn Min-Soo, president and CEO of Samsung Fire & Marine Insurance Co., also saw his compensation increase 13.4 percent although the company’s net profit decreased 2.9 percent. An unnamed official of the company, however, said such an on-year profit fall should not be a big issue when taking into consideration the one-off gain of 361.4 billion won earned from the stock sale of Samsung C&T in 2014.

The paycheck to Chairman Chung Mong-Yoon, the largest shareholder of Hyundai Marine & Fire Insurance Co., also rose 10.8 percent despite a 9.6 percent fall in the company’s net profit. Total compensation paid to Dongbu Insurance Co. President & CEO Kim Jeong-nam in 2015 was 11 percent higher from the previous year, while the company’s net profit remained almost unchanged with 430 billion won over the same period.

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