[Reporter`s View] BOK raises questionable

The actual money in our pockets turns out to be much less than last year. Now that the salaries have been publicly announced, they will have to pay taxes. Doesn`t this help transparency?

Following cross-the-board pay raises for upper management executives and president, the Bank of Korea (BOK) offered a poor excuse.

At the end of last year, the BOK increased the annual pay of its president from 141.6 million won to 185 million this year. The members of the Monetary Board also enjoyed a 63.2 percent pay hike and will receive 175 million won.

The BOK vice-president and inspectors received 59.5 percent raises, while the deputy vice governor received a 41.3 percent hike. For the rest of the BOK employees, all received 7 percent increases along with a new bonus system. Depending on performance and achievement, an employee might receive 50 percent of his or her annual pay as bonus. Should the member of the Monetary Board receive the maximum bonus, the annual salary would be 262 million won.

The problem is that the decision was made in secrecy behind a tightly closed door.

"Due to a change in the tax law, we no longer have the benefit of having a secret fund for our use," a BOK official said. "Actually, our wages are still below the commercial banks."

It is rather odd that the executives of a state-run bank should compare themselves to executives of commercial banks, who must be on a constant run to do business. There is also much curiosity concerning how the executives would divide up the 50 percent bonus incentives at the end of the year. Also, exactly who do the executives of the BOK entertain with the secret funds?

The Ministry of Finance and Economy, which approved the pay hike, stated, "We did so in order to match (the salary level) somewhat with other banks."

As the issue has stirred up public anger, BOK governor Chon Chol-Hwan said through his spokesperson, "The pay hike of the president will be effective with the next president." If so, the governor of the BOK will receive 3.34 million won less than the members of the Monetary Board and 2.84 million won less than the vice governor. Does that mean only the BOK governor will alone continue to receive the secret fund?

Choi Young-Hae moneychoi@donga.com