Kakao Pay Securities: 1 in 4 Employees is an 'Executive'

[Asia Economy Reporter Ji Yeon-jin] It has been revealed that the number of executives at Kakao Pay Securities accounts for 25% of its employees.

According to Kakao Pay Securities on the 21st, the company newly appointed five executives, including Park Mo, Executive Director (Head of Special Finance Division), on the 13th of this month, increasing the number of executives to 61. As of the end of the second quarter, Kakao Pay Securities had 55 executives out of 241 employees. As of this month, the ratio of executives to employees reaches 25%. This is overwhelmingly higher than Toss Securities, which was launched around the same time (4 executives out of 111 employees), and approaches 60% of Mirae Asset Securities, the industry leader by equity capital (108 executives out of 3,941 employees). In terms of ratio, it is ten times higher.

The high executive ratio originated when Kakao Pay Securities was launched after acquiring Baro Investment & Securities. Kakao Pay Securities is a securities company that changed its name after Kakao Pay acquired 60% of Baro Investment & Securities’ shares in February last year to enter the securities business. Currently, Shinhan Capital, the largest shareholder of Baro Investment & Securities, holds 36% of the shares. As of the end of this month, 21 out of the 61 executives at Kakao Pay Securities are from Baro Investment & Securities. Baro Investment & Securities is a corporate finance specialized securities firm, and due to the nature of its business, having executive titles is advantageous for sales, which explains the large number of executives, according to industry sources.

Meanwhile, as labor costs including executives’ salaries increased, Kakao Pay Securities’ profitability shrank. Labor costs in the second quarter amounted to 19 billion KRW, up about 2 billion KRW from 16.9 billion KRW in the same period last year, and operating losses expanded from 1.7 billion KRW to 8.4 billion KRW during this period.