KEPCO's First 'D Grade'
Dismissal Recommendation for 5 Agency Heads Appointed by Moon Administration
In the recent public institution management performance evaluation focused on financial results, 18 institutions received a rating of 'Below Unsatisfactory' or lower. The ratings of energy public enterprises generally declined. Accordingly, performance bonuses for executives and grade 1-2 employees of a total of nine energy public enterprises, including Korea Coal Corporation, Korea District Heating Corporation, Korea Gas Corporation, and six power generation companies, will be reduced.
On the 16th, the Ministry of Economy and Finance held the 8th Public Institution Management Committee chaired by Deputy Prime Minister for Economy Choo Kyung-ho, where they reviewed and approved the '2022 Public Institution Management Performance Evaluation Results and Follow-up Measures (Draft).' This evaluation was conducted by reducing the weight of social value (from 25 to 15 points) and increasing the weight of financial performance indicators (from 10 to 20 points).
Among a total of 130 public enterprises and quasi-governmental institutions, the 18 institutions rated below unsatisfactory will have their operating expenses cut by 0.5 to 1% next year. The government recommended reducing or voluntarily returning performance bonuses for 15 public enterprises with high financial risks. For nine energy public enterprises with high financial risks, including Korea Hydro & Nuclear Power, it was decided to reduce performance bonuses for executives and grade 1 and 2 employees to ensure management accountability. For six public enterprises, including Korea Gas Technology Corporation, which recorded net losses in 2022, voluntary return of performance bonuses by executives was recommended.
Korea Electric Power Corporation (KEPCO) was downgraded from 'Average (C)' last year to 'Below Unsatisfactory (D)' and was excluded from the performance bonus payment target altogether. This is the first time KEPCO has received a D rating. Regarding criticism during the follow-up briefing on management evaluation held at the Seoul Government Complex that KEPCO's deteriorating financial structure was due to government policy decisions and thus difficult to hold accountable, Vice Minister Choi Sang-dae explained, "While there is the aspect of delayed tariff increases, it can also be seen as a lack of painful efforts at the public enterprise level," adding, "Giving a good evaluation to companies with poor financial management performance does not meet the public's expectations."
No institution received the overall 'Excellent (S)' rating. Last year, Korea East-West Power was the only institution to receive an S rating, but this year it dropped to a B rating.
Other ratings were 19 institutions rated 'Outstanding (A),' 48 'Good (B),' 45 'Average (C),' 14 'Below Unsatisfactory (D),' and 4 'Very Unsatisfactory (E).'
2022 Institutional Management Performance Evaluation Results. Source=Ministry of Economy and Finance
On this day, the Public Institution Management Committee recommended dismissal for five heads of institutions (Korea Health Promotion Institute, Korea Construction Machinery Safety Management Corporation, Veterans Welfare Medical Corporation, Fire Industry Technology Institute, Energy Technology Evaluation Institute) that received D ratings for two consecutive years or an E rating this year. All five heads were appointed during the Moon Jae-in administration. Among the 14 institutions rated D, excluding those recommended for dismissal, seven heads who had served for more than six months as of the end of last year received warning measures. Among eight institutions where serious accidents such as fatalities occurred, five heads currently in office, including those at Korea Land and Housing Corporation, also received warning measures.
The committee requires the 18 institutions rated below unsatisfactory to submit management improvement plans and will conduct management improvement consulting. For the eight institutions where serious accidents occurred, safety-related improvement plans will also be requested.
Deputy Prime Minister Choo emphasized, "We have strictly evaluated public institution performance, moving away from past leniency practices," and added, "We will continue policy efforts to ensure that public institution innovation policies yield visible results this year as well."
Choi Sang-dae, the 2nd Vice Minister of the Ministry of Economy and Finance, is giving a briefing on the "2022 Public Institution Management Evaluation Results and Follow-up Measures" at the Government Seoul Office in Jongno-gu, Seoul on the 16th. Photo by Yoon Dong-joo doso7@
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