The Korea Railroad Corporation (KORAIL) performance bonus calculation standard will be raised from the current 80% of base pay to 100% of base pay for the next two years.
Vice Finance Minister Im Gi-geun of the Ministry of Economy and Finance convened the Public Institution Management Committee on the 23rd and reviewed and approved an adjustment to KORAIL's performance bonus calculation standard centered on the above.
Under the Public Institution Management Committee's decision that day, KORAIL's performance bonus calculation standard will be raised to 90% of base pay in 2026 and 100% of base pay in 2027. As the National Railroad Workers' Union signaled a general strike the previous day calling for normalization of performance bonuses, the move is seen as the government's attempt to calm the situation.
To understand how KORAIL's performance bonus calculation standard came to be 80% of base pay, we have to go back to 2010. That year, the Ministry of Economy and Finance (MOEF) issued budget management guidelines prohibiting public corporations from raising base pay. Citing reasons including a union strike, KORAIL adopted the guideline 10 months late. The MOEF held it accountable, and at that time set KORAIL's performance bonus calculation standard at 80% of base pay.
KORAIL followed this standard from 2011 to 2017, then raised the performance bonus calculation standard to 100% of base pay through a labor-management agreement in 2018. Three years later in 2021, the Board of Audit and Inspection pointed out that the standard was excessive, and as a result KORAIL's performance bonus calculation standard has remained at 80% of base pay to this day.
The Public Institution Management Committee is said to have discussed the matter with the Board of Audit and Inspection before deciding to gradually raise KORAIL's performance bonus calculation standard to 100% of base pay. The Board of Audit and Inspection reportedly told the committee that it was a matter for the competent ministry (the Ministry of Economy and Finance (MOEF)) to judge.
Meanwhile, as the National Railroad Workers' Union put its strike on hold that day, all trains are operating normally.