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| The headquarters of Korea Electric Power Corp. (KEPCO) in Naju, South Jeolla Province. Korea Times file |
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| KEPCO CEO Cheong Seung-il |
By Lee Kyung-min
The number of workers at Korea Electric Power Corp. (KEPCO) with an annual salary of at least 100 million won ($74,600) has doubled over the past four years, fueling criticism that the money-losing state-run utility fortified employee benefits at the expense of corporate financial soundness, data showed Wednesday.
The hefty compensation strengthens the finance ministry's move to put in place drastic austerity measures, defined by reductions in employee remuneration and benefits to curtail debt at the country's major state-run energy firms that long remained unscrutinized under the previous Moon Jae-in administration.
KEPCO suffered a record-high operating loss of over 14.3 trillion won in the first six months of this year, a rapid increase from 187.3 billion won in the same period of last year. This is more than twice the annual operating loss of 5.8 trillion won in 2021. Market watchers say the operating loss will exceed 30 trillion won for all of this year, caused by a spike in the price of key global commodities including liquefied natural gas (LNG) due to the Russian invasion of Ukraine.
Its debt amounted to a record-high 165.8 trillion won as of June, up 28.5 trillion won from the year before.
In contrast, KEPCO's capital sank to 55.4 trillion won, down 14.3 trillion won from a year earlier, which is another indication of the firm's deteriorating financial soundness.
The over 165 trillion won figure places the state-run entity at the top of the list of Korean firms with heavy debts. Hyundai Motor had 162.5 trillion won of debt, followed by Samsung Electronics (120.1 trillion won), SK (115.7 trillion won) and POSCO Holdings (43.1 trillion won) as of June.
Over 1 in 10
Data submitted by Rep. Yang Kum Kum-hee of the ruling People Power Party showed the salaries of 3,288 KEPCO employees exceeded 100 million won in 2021, accounting for 14.1 percent of the total 22,388 workers at the state-run utility.
This was double the figure of 1,567 in 2017. In 2020, 2,972 employees received that amount.
KEPCO says the highly paid workers are senior employees who have worked for over three decades, pointing to the seniority-based remuneration structure of the country's state-run organizations.
Under the much-criticized system, employees receive a monthly paycheck irrelevant to their performance evaluations. The more years they work, the higher their salary figures become. Many say the growth-stunting policy frustrates efforts for innovation and stress that wages should be incentivized by fierce competition and subsequent rewards.
"Criticism is inevitable when it comes to the highly-paid KEPCO employees because taxpayers will have to shoulder the entire cost of their salaries in the form of higher utility bills in the months to come," said Lee In-ho, the former chairman of the Korean Economic Association.
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