Some draw as much as 97 million won for 10 days of work
Outside directors at Korean companies may not be fulfilling their roles despite their handsome salaries.
According to the data local firms submitted to the Financial Supervisory Service, some firms paid their outside directors as much as 9.7 million won ($9,200) for each day they spent attending company functions.
Outside directors were made a mandatory part of a company’s management structure in 2001 as part of government efforts to improve transparency at local businesses and to keep those with controlling stakes in check.
However, despite their stated functions as objective observers, only 0.15 percent of issues handled by the board of directors’ at Korea’s 100 largest firms were voted down by outside directors last year.
In addition, data showed that 420 of the 466 outside directors at the top 100 firms supported every issue submitted to the board.
By company, Hyundai Steel’s outside directors were paid the most last year. On average, the steelmaker’s outside directors received 97 million won, despite having attended board meetings on only 10 occasions last year.
While the figure is much lower than Hyundai Steel executives’ average salary of just under 1.56 billion won, outside directors’ average pay far outpaced the 70 million won average for Hyundai Steel employees.
Outside directors at other Hyundai Motor Group companies were also generously paid. Among the 10 companies with the highest salaries for outside directors, four ― including Hyundai Steel ― were members of the automotive group.
With an average of 94 million won, Hyundai Mobis Co.’s outside directors had the second-most pay, while those at Hyundai Motor Co. came in fourth with 81 million won. Kia Motors Corp.’s outside directors were paid 71 million won on average, ranking the carmaker at seventh place.
Hyundai Motor Group firms were followed by LG Group companies that made up three of the top 10.
Having paid its outside directors an average of 83 million won, LG Electronics was ranked third, while LG Corp. and LG Chem were ranked respectively at sixth and ninth places.
LG Corp.’s outside directors were paid 83 million won, while those of LG Chem were paid 65 million won.
By Choi He-suk (
cheesuk@heraldcorp.com)