1 in 3 chaebol owners’ pay checks are under wraps: FSS
[THE INVESTOR] Around 1 in 3 South Korean chaebol chiefs are keeping their pay checks confidential as they remain unregistered at boardrooms.
As of March, eight out of 26 leaders of conglomerates were not registered board members of their listed holding companies or other major subsidiaries, according to the Financial Supervisory Service on May 4.
The eight unregistered chaebol leaders include Samsung Electronics Chairman Lee Kun-hee, Hanwha Group Chairman Kim Seung-youn, Asan Foundation Chairman Chung Mong-joon and Shinsegae Group Chairwoman Lee Myung-hee.
CJ Group Chairman Lee Jay-hyun, Booyoung Group Chairman Lee Joong-keun, Daelim Group Honorary Chairman Lee Joon-yong and Mirae Asset Financial Group Chairman Park Hyeon-joo also remain out of the boardroom, the financial watchdog said.
Under the current law on the capital market and financial investment, registered executives of listed companies who earn 500 million won ($441,965) or more a year are required to report their annual salaries to the financial authority. However, if they are not board members, executives are not obliged to report their pay checks.
Critics have raised concerns over the ineffectiveness of the mandatory salary reporting system, as chaebol owners -- the most probable highest earner of their companies -- are staying out of boardrooms. The law should be revised to include unregistered board members as well, they say.
The system was first introduced in 2013 with an aim to enhance the moral responsibility of corporate executives and empower shareholders with the right to be informed. Registered executives are also obliged to take legal responsibility for decisions made by their companies’ board of directors.
In the US, the top five executives with the highest salaries are required to disclose their paychecks regardless of whether they are registered executives, added critics.
Except for the bedridden Samsung chairman and Daelim’s honorary chairman, who have officially stepped down from management posts and handed the rights over to their sons, the rest of the group owners are at the forefront of management.
Meanwhile, Chung Mong-koo, chairman of Hyundai Motor Group holds registered executive positions at Hyundai Motor, Hyundai E&C and Hyundai Powertech. SK Group Chairman Chey Tae-won is registered with SK Holdings, SK hynix and SK Innovation.
Cho Yang-ho, chairman of Hanjin Group, is a registered executive of Korean Air and Hanjin Kal Corp., the holding company of the airline.
LG Group Chairman Koo Bon-moo, GS Group Chairman Huh Chang-soo and LS Group Chairman Koo Ja-yeol are each registered with their holding companies.
By Song Su-hyun/The Korea Herald (firstname.lastname@example.org)