Performance Halved but 5 Billion Won?…The Secret Behind Securities Firm CEOs' Salaries

Securities CEOs Receive Billions Amid Stock Market Slump in First Half
Effect of Deferred Bonuses from Record-Breaking Last Year's Performance

[Asia Economy Reporter Ji Yeon-jin] Jeong Il-moon, CEO of Korea Investment & Securities, received over 5 billion KRW in compensation in the first half of this year. Amid the domestic stock market slump this year, which significantly shrank the first half earnings of Korean securities firms, what is the secret behind the top executives of major domestic securities companies securing tens of billions of won in compensation?

According to the Financial Supervisory Service's electronic disclosure system on the 17th, Korea Investment & Securities announced in its semi-annual report that CEO Jeong's compensation for the first half of the year was 5,089,170,000 KRW. This amount far exceeds the 1,685,540,000 KRW he received for the entire year last year and is the highest among financial sector CEOs in the first half of this year.

Breaking down CEO Jeong's compensation, his salary was 424,400,000 KRW, and bonuses amounted to 4,664,770,000 KRW. The bonuses included last year's performance bonus of 4,159,170,000 KRW, the 2020 performance bonus of 17,460,000 KRW, the 2019 performance bonus of 243,000,000 KRW, and the 2018 performance bonus of 82,560,000 KRW. Due to the stock market boom triggered by COVID-19, last year's record-high performance bonus was paid in the first half of this year, and past performance bonuses were deferred and paid later, resulting in compensation exceeding last year's annual salary. Most securities firms do not pay performance bonuses all at once but spread them over several years to prevent employee turnover. Kim Nam-gu, chairman of Korea Financial Group and owner of Korea Investment & Securities, is no exception. His first half compensation was 3,159,390,000 KRW, consisting of a salary of 344,400,000 KRW and bonuses including performance bonuses from the past four years totaling 2,814,990,000 KRW.

During this period, Choi Hyun-man, chairman of Mirae Asset Securities, received a total of 3,484,000,000 KRW, including a salary of 833,000,000 KRW and bonuses of 2,645,000,000 KRW. Mirae Asset Securities stated in its semi-annual report, "Despite the unstable market environment caused by COVID-19, we achieved industry-first pre-tax profits exceeding 1 trillion KRW for two consecutive years through thorough risk management and a differentiated business portfolio." It added, "In this process, Chairman Choi strategically expanded overseas business rapidly, increased investments in global quality assets and innovative growth companies, and strengthened digital transformation and pension business, greatly contributing to the company's balanced development."

Among securities company CEOs, Jeong Young-chae, CEO of NH Investment & Securities (2,216,000,000 KRW), and Choi Hee-moon, vice chairman and CEO of Meritz Securities (2,082,240,000 KRW), also received over 2 billion KRW.

Among securities company executives and employees, An Jae-wan, executive director of Meritz Securities, received a total of 4,658,140,000 KRW in the first half, becoming the highest-paid employee excluding CEOs in the financial sector. Choi Mi-hye, managing director of IBK Investment & Securities, also boasted a high compensation of 3,944,000,000 KRW, including retirement income of 3,214,000,000 KRW. Bang Chang-jin, executive director of Korea Investment & Securities, received 3,217,960,000 KRW, with bonuses reaching 3,132,560,000 KRW.

There were also many securities company executives and employees whose compensation exceeded 2 billion KRW. They include Choi Yong-seok, executive director of Hanwha Investment & Securities (2,626,000,000 KRW), Ahn Jae-woo, managing director of BNK Investment & Securities (2,622,000,000 KRW), Lee Chung-han, department head of NH Investment & Securities (2,236,000,000 KRW), Lim Ik-seong, managing director of BNK Investment & Securities (2,184,000,000 KRW), Ahn Seok-cheol, head of Shinhan Financial Investment (executive director) (2,139,000,000 KRW), Kim Chan-il, managing director of Mirae Asset Securities (2,014,000,000 KRW), and Bae Young-gyu, executive director of Korea Investment & Securities (2,019,610,000 KRW). Kang Jeong-gu, branch manager at Samsung Securities, who drew attention as the 'highest-paid' in the securities industry last year with an annual salary of 6,855,000,000 KRW, received 1,982,000,000 KRW in the first half of this year.