In accordance with the internal regulations of the financial authorities, incentives are suspended for two consecutive years.
“I take full responsibility”… Jin Ok-dong relieves the burden
(Seoul = Yonhap Infomax) Reporter Lee Hyeon-jeong = Shinhan Financial Group Chairman Cho Yong-byeong achieved the highest performance last year, but it was found that he did not receive a performance bonus close to 500 million won due to responsibility related to the Lime Asset Management private equity fund crisis.
Chairman Cho, who will step down after the regular shareholders’ meeting on the 23rd, emphasizes again that he is resigning with overall responsibility for the private equity fund crisis, and is trying to relieve the burden of Chairman Ok-dong Jin’s nominee as much as possible. left to the end.
◇ Rhyme discipline unconfirmed… 2 years in a row ‘zero bonus’
According to the explanatory material on the agenda for the 22nd shareholders’ meeting released by Shinhan Financial on the 8th, Chairman Cho received 851 million won in compensation last year. This was the amount corresponding to the basic salary and activity allowance, and the annual bonus was 0 won.
Shinhan Financial Group is holding off on payment of the annual performance bonus of 488 million won that Cho should have received last year.
In principle, the annual bonus is calculated by reflecting the company’s target achievement level, absolute profit scale, and performance evaluation grade, and is paid in the following year.
In return for the performance in 2021, it should have been paid last year, but Shinhan Financial explained that the payment is being withheld according to internal regulations after the financial authorities’ disciplinary procedures related to the Lime incident were carried out.
In 2021, Chairman Cho received a ‘caution’, a light punishment, for violating the duty to prepare internal control standards for incomplete sales of lime funds.
Since then, as the Financial Services Commission’s final decision on disciplinary action has been delayed, it has not received a single penny of incentives for two consecutive years.
The amount of incentive pay for 2021 was not disclosed, but it is estimated to be about 450 to 500 million won, similar to last year.
As the decision on the disciplinary action related to the Lime Fund was delayed, it means that he is not receiving a performance bonus of 1 billion won.
Chairman-nominee Ok-dong Jin also served as Shinhan Bank president at the same time as Chairman Cho, and after receiving a light disciplinary ‘caution warning’, the bank president’s incentive pay has been withheld in full.
In addition, Shinhan Financial Group reorganized its remuneration system from 2021 so that the annual performance bonus can be deducted if the company’s risk management strategy task evaluation score is sluggish.
Depending on future discussions with the Board of Directors and the Remuneration Committee, full annual incentives may not be received.
◇ Unusual emphasis on “Jin Ok-dong, the right person for president”… relieve the rhyme burden
Shinhan Financial is focusing on emphasizing efforts to resolve the Lime Fund crisis during Shinhan Bank’s president-elect Jin, who will rise to the position of chairman, at this shareholders’ meeting.
Shinhan Financial spent most of its time in severing the link between the nominee Jin and the Lime Fund by organizing 14 pages of matters related to the Lime Fund in the explanatory material for the agenda for the shareholders’ meeting.
It is very unusual for Shinhan Financial Group to discuss the legitimacy of the appointment of a CEO while focusing on a specific issue.
It was evaluated that it made a significant contribution to resolving the situation by mentioning that the president of Jin preemptively issued an order to suspend sales, strengthened the bank-level internal control system for the re-opening site, improved the KPI system, and implemented preemptive compensation for damage. .
In addition, Shinhan Financial also emphasized that the period when Jin’s appointment as Shinhan Bank president overlapped with the lime fund sales period was only four months, and that the ‘cautionary warning’ sanction received from the Financial Supervisory Service was not a reason for disqualification as an executive.
In particular, Shinhan Financial Group expressed Woori Bank as ‘A Bank’ and compared it to highlight Jin’s nominee.
Shinhan Financial stated that the sales amount of Lime Fund was 270 billion won, which is less than that of Bank A (350 billion won), and the sales period was only 4 months, but Bank A indicated that it was made over a long period of time over 2 years.
The overlapping period of fund sales with Jin-nominee, who was then president, was short, from April to August 2019, but Woori Financial Group Chairman Son Tae-seung, then president of Woori Bank at the time, mentioned that the overlapping period between the sales period and the tenure period reached about 16 months.
In addition, he explained, “Unlike Bank A, the lime fund sold by Shinhan Bank has a double safety device, and the maturity of the product and the maturity of the underlying asset are the same, so the product design itself is a stable structure from the customer’s point of view, unlike Bank A.”
Shinhan Financial Group emphasized that it was actually a ‘closed case’, saying that Chairman Cho took responsibility for the private equity fund crisis and decided to resign.
It seems that it is Chairman Cho’s will to prevent the remaining traces of the Lime crisis from becoming an obstacle to running the business at the time when nominee Jin ascends to the chairmanship.
Shinhan Financial said, “It is not known that the responsibility for the Lime incident is to be held by the CEO and chairman, who is in charge of group management, but it is excessive to hold Jin nominee responsible because his tenure at the time overlapped by only about 4 months.” .
At the end of last year, Chairman Cho suddenly announced his intention to resign at the Chairman Candidate Recommendation Committee (Hoechou Committee), saying that he would take responsibility for the private equity fund crisis.
He said, “The most heartbreaking thing is that our customers have suffered a lot of damage (due to the private equity fund crisis),” he said. said.
An official from Shinhan Financial said, “Chairman Cho is trying to carry the burden as much as possible so that the situation in which the organization is caught up in the Lime incident does not repeat as he handed over his seat to Jin-nominee at this shareholders’ meeting.” It makes sense,” he said.
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This article was serviced at 08:41 on the Infomax financial information terminal.
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