[Exclusive] Salary Rebellion Among Heads of Agencies Under the Ministry of Land, Infrastructure and Transport

Basic Annual Salary of Construction Technology Training Institute Director
252.08 Million KRW, Higher Than Deputy Minister
More Than Twice That of Other Institution Heads

Converted to Other Public Institution Last Year
Did Not Follow Public Enterprise Salary Guidelines
Controversy Over Board Acting as Rubber Stamp

[Asia Economy Reporters Hyunju Lee and Minyoung Kim] It has been revealed that the annual salary of the head of the Construction Technology Education Institute under the Ministry of Land, Infrastructure and Transport (MOLIT) is higher than that of the MOLIT Vice Minister and about twice as high as that of other institution heads. The Construction Technology Education Institute is designated as an "Other Public Institution," and although the basic salary of its head should be adjusted to the level of the MOLIT Vice Minister, this is not mandatory, so the salary was reflected in the related budget only after approval by the board of directors. There are criticisms that this contradicts the government's policy to overhaul the lax finances of public institutions, and questions are also being raised about the responsibility of the higher authority, MOLIT.

According to data analyzed on the 23rd by the office of Kang Dae-sik, a member of the National Assembly's Land, Infrastructure and Transport Committee from the People Power Party, the basic annual salary of the head of the Construction Technology Education Institute this year is 252.08 million KRW. This is more than twice the salary of heads of other large public institutions under MOLIT. The annual salary of the Korea Expressway Corporation president is 128.72 million KRW, Korea Railroad Corporation 126.25 million KRW, and Korea Airports Corporation 137.14 million KRW. The Construction Technology Education Institute's budget is about 21 billion KRW, which is 0.15% of the Korea Expressway Corporation's budget, but its head's salary is about 123 million KRW higher than that of the Korea Expressway Corporation president. In terms of organizational size, Korea Railroad Corporation has about 32,500 employees, whereas the Construction Technology Education Institute has only 83 employees.

The reason the head of the Construction Technology Education Institute's salary is set so high is that since its transition from the private sector to an "Other Public Institution" in February last year, it has not been applying the executive compensation guidelines for public enterprises and quasi-governmental institutions. According to the compensation guidelines, the basic salary of the institution head should be linked to the Vice Minister's salary, and if the institution head's basic salary exceeds that, it should be set at the same amount. The MOLIT Vice Minister's salary is in the 140 million KRW range. However, for "Other Public Institutions," the compensation guidelines are not mandatory, so the salary can be set only with the approval of the board of directors.

Minister of Land, Infrastructure and Transport Won Hee-ryong is announcing the Yoon Seok-yeol administration's first housing supply plan on the 16th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

There are also criticisms that the board of directors of the Construction Technology Education Institute merely acted as a "rubber stamp." Looking at the board's composition, the chairman is Kim Sang-su, president of the Korea Construction Association and a representative of a private construction company. Among the 10 non-executive directors, except for two government-recommended members, one is a former MOLIT official, and the remaining seven are all representatives of construction companies. The board decided to cut the performance bonus entirely from the head's salary last year, but increased fixed allowances and salary-related welfare expenses, effectively approving a salary level similar to the previous year. The budget was arranged so that cash-type position allowances were received even though business promotion expenses were already being used.

When considering the financial soundness of public institutions, there are calls to adjust the excessive salary of the institution head. Adjusting the head of the Construction Technology Education Institute's salary to the MOLIT Vice Minister level would save 100 million KRW in the budget. Assemblyman Kang Dae-sik said, "While granting autonomy to public institutions, MOLIT may have actually condoned moral hazard," and added, "MOLIT should actively review whether there were any procedural problems in the budget allocation for the Construction Technology Education Institute head's salary and whether there were any errors in the process."

A representative of the Construction Technology Education Institute explained, "The head was appointed before the designation as an Other Public Institution and was receiving a private-sector level salary, so it was not possible to sharply reduce the salary to the public institution level," adding, "It is still a transitional period from a private corporation to a public institution, so it will take time to align systems such as salaries to the public institution level."