New data reveals a staggering pay discrepancy among Korean companies, where the highest-paid executives earn an average of 24 times more than their employees. This represents a significant increase from the previous year’s gap of 23 times.

According to a report released by the corporate analysis research institute Leaders Index, the average annual salary of employees at 291 major Korean companies last year was 87.13 million won ($78,000). In comparison, the average compensation for the highest-paid executives was 2.09588 billion won ($1.88 million). This represents a 24.1 times difference, up from 22.7 times the previous year.

The widening gap is attributed to a 2.8% decrease in the average employee salary from the previous year (89.65 million won or $80,000), while the compensation for the highest-paid executives increased by 2.9% in the same period (2.03608 billion won or $1.82 million). These figures include severance pay for both employees and executives and also reflect the actual amount of stock-based compensation such as stock options.

Paygap/ Leader’s Index

The distribution sector showed the most significant disparity, with the highest-paid executives earning 35.8 times more than the average employee salary (58.41 million won or $52,000) at 2.09177 billion won ($1.87 million). This was followed by the food and beverage sector (34.9 times), information and communication (IT), electricity, and electronics (31.7 times), services (31 times), and auto parts (28.3 times). The banking sector showed the smallest gap at 9.6 times, mainly because there are no controlling shareholders who receive significantly higher compensation than regular employees and professional managers.

Among advertising companies, Kakao stood out with the former CEO Namkoong Hoon earning 98 times more than the average employee salary (99.78 million won or $89,000), taking home 9.899 billion won ($8.86 million), including profits from exercising stock options. Other companies with significant pay gaps include E-mart (77.1 times), Hyundai Motor (70.1 times), HiteJinro (68 times), NCSoft (67.7 times), Samsung Biologics (66.9 times), and Hyundai Department Store (66.8 times).

The highest-paid executive was Lotte Chairman Shin Dong-bin, who earned a total of 21.281 billion won ($19.05 million) from seven group companies. He was followed by Hyundai Motor Chairman Chung Eui-sun (12.21 billion won or $10.94 million), Hanwha Chairman Kim Seung-youn (10.82 billion won or $9.7 million), CJ Chairman Lee Jae-hyun (9.936 billion won or $8.9 million), former Kakao CEO Namkoong Hoon (9.899 billion won or $8.86 million), Hanwha Vice Chairman Kim Dong-kwan (9.199 billion won or $8.25 million), Doosan Chairman Park Jeong-won (8.429 billion won or $7.56 million), and LG Chairman Koo Kwang-mo (8.329 billion won or $7.47 million). This ranking could change when reflecting stock-based compensation such as restricted stock units (RSUs).