Executives at Large Corporations with 1+ Trillion Won Sales Get 13.3 Times More Money than Employees

The Korea CXO Research Institute announced on Jan. 22 that the annual income of registered executives at large corporations with sales of over 1 trillion won (US$923.45 billion) is 13.3 times higher than their employees. The institute analyzed the appropriateness of pay rates in the top 1,500 corporations in Korea as of 2013.

The average yearly pay of the executives in the study is 822.76 million won (US$759,774), while the average pay of an employee is 61.21 million won (US$56,524). That is a difference of 761.55 million won (US$703,250.53), or 13.3 times higher salaries for executives.

On other hand, the registered executives at small and medium-sized companies with sales worth less than 100 billion won get paid only 4.8 times higher than the employees, a much lower differential than large companies.

Taking the top 1,500 companies a whole, the registered executives make an average of 314.48 million won (US$290,405.39), while the employees make 45 million won (US$41,555.08). The wage gap between them is almost 7-fold.

The CXO Research Institute said, “We have concluded that executives at listed companies in Korea generally get paid 15 times higher than employees. It means if they get paid more than 15 times higher, that is too much.”

The institute collected registered executives’ income data from the business reports of relevant companies. On average, the 1,500 companies have 3 registered executives each.

SK Innovation shows the highest wage gap, with its executives making 70.4 times its employees salaries. The multipliers of Samsung Electronics and Hyundai Department Store executives are 65.9 and 63.5, while SK, e-Mart and SK C&C pay their executives 55.7x, 54.9x, and 47.2x their employees' average salary.

Industrial Bank of Korea has the lowest gross paid executives compared to the amount of its employees. It paid 802.9 billion won (US$741.44 million) to its employees, while it paid 341 million won (US$314,895.19) to its registered executives, which is 0.042 percent of the gross pay of its employees.

By taking a look at only amounts of money, Samsung Electronics has the highest average income per executive, amounting to 6.589 billion won (US$6.08 million) per year. SK comes in second in executive annual salary (5.0215 billion won, or US$4.64 million); SK Innovation in third (4.72988 billion won, or US$4.37 million); Hyundai Department Store in fourth (3.37433 billion won, or US$3.12 million); SK C&C in fifth (3.18033 billion won, or US$2.94 million); Meritz Fire & Marine Insurance Co. in sixth (2.79555 billion won, or US$2.58 million); Samsung C&T in seventh (2.53566 billion won, or US$2.34 million); Samsung Heavy Industries in eighth (2.409 billion won, or US$2.22 million), Orion in ninth (2.391 billion won, or US$2.21 million); and SKC in tenth (2.38133 billion won, or US$2.2 million).

Oh Il-sun, head of the institute, said, “Even though the average income of the registered executives at Samsung Electronics is the highest, the figure is only 0.017 percent of its sales (1,495th) and 0.121 percent of its operating profits (1,479th). So, it is hard to say that it is too much. In the case of Samsung Electronics, it paid 66 times higher salaries to its executives than its employees. It means the company paid relatively less to its employees compared with their performance.”