Starting in Jan. next year, when financial companies disclose their annual reports on compensation systems, they will also disclose the average compensation by rank and gender. Previously, only total compensation for executives and employees and total compensation and performance-based pay by rank were available.
According to the Korea Financial Investment Association's regulatory information system on the 29th, the association said it will revise the "standards for preparing annual reports on governance and compensation systems."
Under this revision, financial investment companies obligated to disclose annual reports on compensation systems will also disclose average compensation by rank and gender.
Until now, only total compensation for executives and employees, average compensation for employees, and total compensation and performance-based pay by executives versus staff were disclosed. If the revision passes, going forward it will be possible to see differences in average compensation by gender and rank at each financial company.
The annual report on governance and compensation systems is a disclosure intended to inform a financial company's general meeting of shareholders about policies and operating practices related to the company's governance and compensation system.
This disclosure is required for securities firms with assets of 5 trillion won or more and asset managers with assets under management of 20 trillion won or more. As of now, 23 securities firms and 19 asset management companies are subject to the rule.
The Korea Financial Investment Association said the revision "reflects amendments to the governance law and is a measure to expand gender-equal pay disclosure." The revision is expected to take effect on Jan. 7 next year.
Meanwhile, the revision also includes measures to strengthen the board of directors' authority over internal controls. It includes provisions on the board's establishment and oversight of policies on internal controls and its oversight of the CEO's fulfillment of overall management duties regarding internal controls.