Until a recent amendment to the Korean Commercial Code, the compensation of executives in listed companies was not required to be disclosed to shareholders. Most developed economies require this disclosure.
The prior law in Korea only required the total compensation for all directors to be disclosed to shareholders. The new rule, which comes into effect on November 29, 2013, requires that all registered directors of companies annual compensation is disclosed if the amount of the individual’s annual compensation exceeds KRW 500 million Korean won.
The amended Korean Commercial Code also requires that companies disclose the criteria for choosing the compensation. We suspect to see cases filed related to the payment criteria and differentials in payment between certain directors.
Some family-controlled companies will likely drop some family members from boards. These family members will likely be paid as mere company employees and not as board members. Thus, circumventing the purpose of the law. We will update the reader on developments with regard to this issues.
Other articles that may be of interest:
- Legal Compliance Checklist for Companies Doing Business in Korea
- Compliance Control Standards in Korea
- 7 Musts to Succeeding in Business in Korea
Sean’s profile may be found at Sean C. Hayes. To schedule a call with Sean Hayes, please click: Schedule a Call with Sean Hayes.
Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He assists clients in their contentious, non-contentious, and business development needs. Sean is rated a Top 100 attorney, and his firm was rated a top dispute resolution law firm for Korea.
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