35% of Bankers Make Six-Figure Salaries

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

But their high pay was not a reward for better performance but simply due to the banks' seniority system.

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

Bank workers start earning six-figure salaries around 15 years after they begin their job.

The trend was apparent in the whole financial industry, with 6.5 percent of its 282,514 workers making more than W150 million, compared 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 experts say the wages owe more to a seniority-based pay system than ability. Some 67.5 percent of bank workers are paid on a salary scale, the only industry where that applies to more than 50 percent of all workers.

The rigid hierarchies have also led to the graying of bankers. In 2010, bankers over 50 accounted for just 7.6 percent of all workers, but that had more than doubled to 15.3 percent last year. In contrast, the proportion of bankers in their 20s fell from 22.7 percent to 14.1 percent and of those in 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 in terms of competitiveness last year. It dropped out of 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 seen as part of the public sector. We need to boost competitiveness by making labor conditions more flexible."