Large Corporation CEOs and Employees' Salary Gap Narrowed but... "Still Over 15 Times Difference"

Leaders Index Analyzes Compensation at 284 Companies
Food and Beverage Sector, CJ CheilJedang Top the Pay Gap List

Last year, the gap between the highest-paid executives' compensation and the average employee salary at major South Korean conglomerates generally narrowed, but there was still a difference of more than 15 times between them.

According to the corporate analysis institute 'Leaders Index' on the 26th, among the top 500 companies by sales, 284 companies that submitted business reports and disclosed executives earning over 500 million KRW were analyzed by comparing the CEO salaries, average compensation of non-registered executives, and average employee salaries. The average compensation of the highest-paid executives at each company last year was 1.45 billion KRW, a 1.3% decrease from the previous year (1.469 billion KRW). In contrast, the actual average salary of employees excluding non-registered executives was 95.1 million KRW, which is a 3% increase from the previous year (92.3 million KRW).

As the highest-paid executives' compensation decreased and employee salaries increased, the pay gap slightly narrowed from 15.9 times in 2023 to 15.3 times last year, but the difference remained significant.

By industry, the sector with the largest pay gap between the highest-paid executives and employees was food and beverage. In this sector, the average highest executive salary (1.995 billion KRW) and the average employee salary (67.18 million KRW) showed a 29.7 times difference. This was followed by distribution (22.8 times), pharmaceuticals (22.2 times), IT, electrical and electronics (21.7 times), and automotive and parts (20.6 times).

On the other hand, the banking industry had the smallest gap. The gap, which was 8.6 times in 2023, narrowed to 8.3 times last year. Other financial sectors such as credit finance (8.4 times), securities (10 times), and insurance (10.1 times) also had relatively smaller gaps.

Among individual companies, CJ CheilJedang showed the largest gap. Chairman Sohn Kyung-shik received 8.171 billion KRW while employees earned an actual average salary of 77.02 million KRW, resulting in a 106.1 times difference. Following were LS Electric (87.3 times), BH (84.2 times), Samsung Biologics (75.5 times), Hyundai Department Store (73.9 times), Emart (71.8 times), and HiteJinro (65.2 times).

Last year, the company with the highest actual average employee salary excluding non-registered executives was SK Energy, recording 160.38 million KRW, a 5.2% increase from the previous year (152.51 million KRW).

The individual with the highest compensation excluding retirement pay was Lee Jae-hyun, Chairman of CJ Group. Last year, he received a total of 19.374 billion KRW from CJ and CJ CheilJedang. The second highest was Shin Dong-bin, Chairman of Lotte Group, who received 17.834 billion KRW from four affiliates. However, since the business reports for Hotel Lotte and Lotte Property & Development were not disclosed, those salaries were not included. Cho Hyun-sang, Vice Chairman of HS Hyosung, ranked third with a total of 15.19 billion KRW from Hyosung and HS Hyosung last year. This record excludes retirement income (17.192 billion KRW) received from Hyosung. Although Vice Chairman Cho’s salary and bonuses were below 7 billion KRW, his ranking surged after receiving a special merit payment of 8.5 billion KRW from Hyosung.

By group, LS Group had the most individuals in the top 30 for personal compensation, with five members. CJ had three, while Hanwha, Hyundai Motor, SK, GS, and Hyundai Department Store each had two members on the list.

Meanwhile, in this survey, CEO compensation was based on the highest-paid decision-maker (C-level) among those disclosing salaries over 500 million KRW. Retirement pay was excluded, but stock options were included. The average salary for non-registered executives was the average compensation per non-registered executive as stated in the business report, and the average employee salary used was the actual figure excluding non-registered executive compensation from the overall average salary.