35% of Bankers Make Six-Figure Salaries

Thirty-five from every 100 bankers earned a six-figure wage last year, plus some seven percent of them made more than W150 million (US$1=W1,225).

But their high pay had not been an incentive for better performance but simply because of the banks' seniority system.

According to a report by the Korea Institute of Finance out last month, 35.1 percent of 125,031 bank personnel in Korea earned a lot more than W100 million in 2019, up five percentage points from 2018. The proportion of these earning over W150 million rose from three percent to 7.2 percent over the same period.

Bank personnel start earning six-figure salaries around 15 years once they begin their job.

The trend was apparent in the complete financial industry, with 6.5 percent of its 282,514 staff making a lot more than W150 million, in comparison to 3.5 percent in 2018.

Predictably the proportion of fat cats was particularly large among brokers with 11.5 percent in securities and 12.6 percent in asset management due to hefty bonuses.

But authorities say the wages owe more to a seniority-based pay system than ability. Some 67.5 percent of bank personnel are paid on a wage scale, the only industry where that pertains to more than 50 percent of most workers.

The rigid hierarchies have also led to the graying of bankers. This year 2010, bankers over 50 accounted for 7.6 percent of all workers, but that had a lot more than doubled to 15.3 percent this past year. On the other hand, the proportion of bankers in their 20s fell from 22.7 percent to 14.1 percent and of these within their 30s from 41.4 percent to 37.7 percent.

The industry's wage growth reflects no improvement in competitiveness. According to Switzerland's Institute for Management Development, Korea's financial industry ranked 34th out of 63 countries regarding competitiveness this past year. It dropped from the top 30 in 2015.

Kim So-young at Seoul National University said, "Competition is fierce in the global financial industry, but in Korea it's almost viewed as the main public sector. We need to boost competitiveness by making labor conditions more flexible."