Four major commercial banks were found to have paid their executives higher salaries in the first half compared to the previous year despite a sharp drop in their profit figures.
According to the Financial Supervisory Service on Tuesday, the per capita salary for the four banks’ 37 executives reached 79.45 million won ($69,100) during the first six months of 2013.
The figure reflected a 3 percent rise from the 76.85 million won posted during the same period last year. The collective payment given to the 37 senior bankers, including CEOs and other board members, reached 2.94 billion won.
In terms of average payments for the executives, Shinhan Bank topped the list with 98.1 million won, followed by KB Kookmin Bank with 89.2 million won, Hana Bank with 68.8 million won and Woori Bank at 65 million won.
In contrast, the first-tier banking industry saw its first-half earnings fall 46 percent from 5.4 trillion won to 2.9 trillion won on-year.
The FSS recently launched a full-fledged investigation into the so-called propriety of the income levels of chief executives in the financial industry.
The investigation comes amid mounting criticism that CEOs of financial companies were paid “excessively” high amounts despite their companies’ falling profitability.
Regulatory officials said that “some executives were found to have enjoyed higher salaries not only this year, but last year despite the poor performance in bank earnings.”
An official said the FSS has uncovered some problems in performance-based bonus payment systems at some banks. “We plan to make inquiries into their salary calculation methods and whether those are appropriate.”
He noted, however, that the supervisory agency was neither entitled to specify an optimum income level for executives nor issue a warning.
The FSS is expected to only verbally instruct financial firms to lower the average income if it rules that the pay goes far beyond a rational or tolerable level compared to the firms’ yearly earnings.
