The Financial Supervisory Service (FSS) has put a stop to the practice of Hana Financial Group hiring retired executives as advisors and paying them high consulting fees. The FSS guided Hana Financial to strengthen the requirements for hiring advisors and to obtain board approval when appointing a representative director as an advisor.
According to financial authorities on the 25th, the FSS recently conveyed management considerations of this nature to Hana Financial. The FSS pointed out that the qualification requirements for advisors under Hana Financial's 'Advisory Committee Operating Regulations' are vaguely and declaratively defined, lacking specificity. Hana Financial enters into advisory contracts for one year upon the retirement of executives and for two years upon the expiration of terms for CEOs of major subsidiaries such as the bank president.
The FSS noted that advisors complete advisory reports in a formal manner, which is insufficient for actual work utilization. It also stated that when paying high consulting fees to advisors who are former representative directors, it is necessary for the board to review the signing of advisory contracts, considering that the advisory content may be referenced in the management's decision-making.
The FSS ordered that it be institutionalized to require board approval when appointing former representative directors as advisors. It also guided that the qualification requirements for advisors should be specified in accordance with relevant laws and internal regulations, and that advisory reports should be recorded in detail.
It has been reported that retired executives of Hana Financial receive 60-80% of their base salary as consulting fees when reemployed as advisors. As of 2023, Hana Financial has rehired 21 retired executives as advisors.