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| Korea Electric Power Corp. (KEPCO) headquarters in Naju, South Jeolla Province / Korea Times file |
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| KEPCO CEO Cheong Seung-il |
Korea Electric Power Corp. (KEPCO), the country's largest utility firm, and 11 of its subsidiaries spent about 2.5 trillion won ($1.7 billion) on employee bonuses over the past five years, according to data provided by a ruling party lawmaker, Tuesday, in what he said was the "height of irresponsible greed" of state-run firms at the expense of taxpayers.
The heated criticism comes as KEPCO's operating loss is expected to break a record, exceeding 30 trillion won this year.
The trade ministry plans to announce a rate hike next month, cornered by spiking prices of key global commodities including crude oil and liquefied natural gas (LNG). The energy price surge is due mostly to factors driven by Russia's invasion of Ukraine.
Experts say the geopolitical uncertainties fail to rationalize the trillions of won in bonuses, since they clearly neglected ― or overlooked at best ― their financial soundness, as highlighted by a lack of risk management measures that should have factored in external shocks.
Further fueling criticism of the state utility firm is the average return on investment of 4.3 percent registered by 13 local energy firms that received a total 511.2 billion won in investments from KEPCO. Only 22 billion won had been recovered as of last year. A total of 10 firms failed to generate any return on investment, including seven whose financials are impaired.
"Taxpayers will have a hard time understanding why they have to pay higher electricity rates when they think it is clear that KEPCO is at fault," said Lee In-ho, former chairman of the Korea Economic Association.
Data released by Rep. Park Soo-young of the ruling People Power Party on the National Assembly Trade, Industry, Energy, SMEs, and Startups Committee showed that over 2.48 trillion won was spent on bonuses between 2017 and 2021 for KEPCO and 11 of its subsidiaries including Korea Hydro & Nuclear Power (KHNP).
KEPCO spent 862.5 billion won in the period, despite its tanking operating losses. Its operating profit stood at 4.95 trillion won in 2017 at the beginning of the previous Moon Jae-in administration, but plummeted for the following two years to register an operating loss of 1.27 trillion won in 2019. The figure rebounded briefly to over 4 trillion won in operating profit In 2020, but it was more than offset by the operating loss of over 5.86 trillion won amid surging global energy prices.
"KEPCO and its subsidiaries have essentially had a celebration with taxpayers' money, all while their corporate financials tanked under the nuclear phase-out policy of the Moon administration," Park said. "The data should serve as a wake-up call for state-run firms that have long remained irresponsible and free of accountability over lax management."
Adding to the criticism is earlier similar data provided by a lawmaker of the same party in August.
Data submitted by Rep. Yang Kum-hee 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 1,567 workers in 2017. In 2020, 2,972 employees received that amount.
KEPCO said the bonuses are set and paid by the government. "We will continue efforts to improve financial soundness," a KEPCO official said.
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