South Korea's top financial regulator warned Tuesday of punitive steps against state-funded financial institutions for the delayed adoption of incentive wage systems opposed by unions.
Financial Services Commission chairman Yim Jong-yong said that state-run financial companies should streamline their structure by introducing a new corporate culture and performance-based incentives.
"A performance-based incentive culture must be adopted at an early date," he said, lashing out at an easy-going attitude and complacency at South Korea's state-run financial companies which provide a higher pay than ordinary private companies.
For example, the annual average wage at the Korea Securities Depository stands at more than 100 million won ($85,400), he said at a meeting with the heads of state-run financial institutions.
Companies that fail to adopt the new system in time will see frozen wages and expenses as well as a cut in their budget, manpower, and wage, he said.
Yim's message comes as state-run creditor banks including the Korea Development Bank were under pressure to lead the restructuring of troubled private firms. A debate has heated up over how to expand their capital before bailing out debt-stricken firms.
The Korean Financial Industry Union, an umbrella bank union group, has threatened to go on a strike, demanding financial regulators stay away from labor-management relations.
Yim, however, said public financial companies should reform themselves and abandon an inefficient corporate culture before leading the restructuring of private firms.
Aju News Lim Chang-won = cwlim34@ajunews.com