Lee Bok-hyun "Securities Firms Facing Liquidity Difficulties Should Be Cautious with Performance Bonuses and Cash Dividends"

[Asia Economy Reporter Lee Jung-yoon] On the 31st, Lee Bok-hyun, Governor of the Financial Supervisory Service, stated that securities firms experiencing liquidity difficulties should be cautious in paying performance bonuses or cash dividends.

At the executive meeting held that day, Governor Lee urged, "Some securities firms that have faced liquidity challenges due to increased volatility in real estate project financing (PF) and the short-term financial market need to be more cautious in paying performance bonuses to employees and cash dividends."

He added, "For securities firms with high real estate exposure, it is desirable to reasonably calculate and pay performance compensation after thoroughly reviewing future real estate market conditions and risks," emphasizing, "The supervisory authorities also need to examine the appropriateness of the performance compensation systems related to real estate PF in securities firms."

He further explained, "While shareholder return policies such as dividends by securities firms are fundamentally matters to be autonomously decided by individual companies based on management judgment, it is necessary to adopt a more responsible and thoughtful attitude to ensure that no liquidity burdens arise from some securities firms receiving liquidity support from external sources such as the Korea Development Bank during the recent short-term financial market tightening phase and still conducting dividends."