이 기사는 2021년 03월 24일 07시57분 thebell에 표출된 기사입니다

The total compensation for Cho Won-tae, chairman of Hanjin KAL and its subsidiary Korean Air, increased nearly 64% last year, despite the airline’s poor financial performance due to the Covid-19 pandemic and a decline in compensation for other executives and employees.

Annual reports showed that Hanjin KAL and Korean Air paid Cho annual compensation worth 1.36 billion won ($1.21 million) and 1.73 billion won respectively, up 165% and 26% from 2019. The total pay of 3.1 billion won represented a 64% increase compared to a year earlier.

This contrasts with other executives of the two companies: Non-director executive officers of Hanjin KAL and Korean Air received an average compensation of 174 million won and 180 million won respectively, down 9% and 20% from a year ago.

The average compensation for Hanjin KAL employees rose 27% to 94 million won last year. But employees at Korean Air were paid on average 68.2 million won, about 16% less than a year earlier.

“Cho received a pay increase after his promotion from president to chairman,” Korean Air explained. “His pay increase began to be applied in April last year, a year after he took the chairman role in April 2019. He also stopped taking 50% of his salary last year.”

Korean Air’s executives have been forgoing 30% to 50% of their monthly salaries since April last year as the pandemic took a toll on the business.

The flag carrier reported revenue of 7.6 trillion won in 2020, down 38.6% year-on-year. Its operating income also fell 38.1% to 108.9 billion won, although the company managed to remain profitable largely thanks to a decrease in labor costs. The total compensation and retirement benefits paid to the company’s executives and employees in the year stood at 1.62 trillion won, down 22% from the previous year.

Some industry watchers say an increase in Cho’s compensation could be related to the burden of inheritance tax. After late chairman Cho Yang-ho, father of Cho Won-tae, died in 2019, his 17.8% stake in Hanjin KAL was inherited to members of the founding Cho family, creating a liability for inheritance tax of 270 billion won.

Tax authorities allowed Cho to pay the amount in six installments over a five-year period. To pay the installment, he borrowed a total of 52.7 billion won from four banks by using his shares in Hanjin KAL as collateral.

Interest rates for the loans ranged from 2.25% to 3.3%. This is equivalent to an annual interest payment of roughly 1.2 billion won, which is above the 1.1 billion won total compensation he received in 2018. (Reporting by Gyoung-tae Kim)