[Asia Exclusive] CEO Jeong Il-moon: "Not Paying Compensation, but Investing in Customer Trust"

Incomplete Fund Sales 100% Compensation Plan Before and After
Selection Through Full Survey. Prevention Measures Included
Comprehensive Financial Companies Must Fully Compensate Incomplete Fund Sales

Jung Il-moon, President of Korea Investment & Securities, is being interviewed by Asia Economy on the 20th. / Photo by Moon Ho-nam munonam@

[Asia Economy Reporters Jeon Pil-su and Hwang Jun-ho] On June 16, in a conference room next to the CEO's office at Korea Investment & Securities located in the heart of Yeouido, the sound of someone wiping away tears was unexpectedly heard. It was during a dialogue session between CEO Jeong Il-moon and 31 MZ generation employees forming the Junior Board. This took place immediately after CEO Jeong announced a full compensation plan for investments in 10 incomplete funds.

At a time when the textbook argument that "the seller has no responsibility to compensate" was gaining traction, CEO Jeong spoke up. He said, "There was a problem with a fund sold by an employee at a certain branch. Then, a customer went to the elementary school where her child attends and held a picket protest. They protested saying, 'The mother of a certain grade and class sold this kind of fund.' Imagine how shocked that employee must have been. I heard that child said they would no longer go to school."

The atmosphere in the room grew solemn. He added, "It’s not just that person. There was also someone who received psychiatric treatment for a year due to the flood of complaint calls without even time to go to the bathroom. This is not someone else’s story; it’s our story."

CEO Jeong emphasized, "While trust from customers outside the company is most important, to me, you are also customers. The hearts of customers caught in such incidents are broken, but the pain of employees is also indescribable." The employees began to lower their heads, and CEO Jeong could not raise his own.

Jung Il-moon, President of Korea Investment & Securities, is being interviewed by Asia Economy on the 20th. / Photo by Moon Ho-nam munonam@

On June 20, at the site where the meeting took place, CEO Jeong recounted the situation. Although more than two months had passed, the compensation plan had been prepared for a long time and had a significant impact. CEO Jeong recalled every moment clearly.

All preparations were made in secret until the compensation plan was announced. The intention could have been distorted, and reactions were inevitably sensitive. Noise was forbidden. They reviewed 1,300 funds one by one to select those requiring compensation and completed legal reviews. They even prepared measures to prevent recurrence.

Efforts to persuade shareholders and the board of directors were also conducted behind the scenes. CEO Jeong asked Chairman Kim Nam-gu of Korea Financial Group and other board members what choice they wanted to make first. "If we say we knew the funds were problematic, we would be 'bad guys,' and if we say we sold them unknowingly, we would be 'fools.' But do you think we only have two choices? That’s not the case. The nature of these funds is not the essence of the problem. Recovering the lost trust of customers should be the core issue. If we just were a securities company, it might be different, but since we consider ourselves a 'comprehensive financial company,' we need to change our perspective on the problem," he said. He also persuaded them by saying, "Customers who subscribed to these funds came for 2-3% interest per year. Can we really consider them securities customers? To accommodate them, we must become a comprehensive financial company, and if we do not compensate, we are giving up on them."

Even at a gathering where he invited employees who had just finished their final statements at the Pop Funding disciplinary hearing to their homes, he did not mention the compensation plan at all. While comforting the employees whose spirits were down as they emptied their wine glasses, he kept the compensation plan secret. He explained, "Some said we offered 100% compensation to lower the disciplinary severity at the hearing, but even the employees did not know about the compensation plan during the process."

Jung Il-moon, President of Korea Investment & Securities, is being interviewed by Asia Economy on the 20th. / Photo by Moon Ho-nam munonam@

From the press conference held before the Junior Board was formed until the end of last month, investors who had subscribed to Lime, Optimus, Discovery (US Fintech), Samsung Gen2, Hastings (Pop Funding), Jarvis (Pop Funding), Fidelis Trade Finance, Hastings Cultural Contents, Hastings Cordelia, and Mir Trust at Korea Investment & Securities were fully compensated. This involved 806 accounts and 158.4 billion KRW.

CEO Jeong said, "A financial institution that loses trust, whether from customers or employees, is not a financial institution. If we restore customer trust by compensating, isn’t that worth paying for?" He continued, "Compensating 100% for incomplete sales funds is not about paying compensation but investing in trust," and added, "Korea Investment & Securities will never sell such funds again."

After finishing the Junior Board session, CEO Jeong boarded the KTX to visit client stores. His smartphone kept ringing with incoming texts, emails, and KakaoTalk messages. These were messages of "Thank you" or "I appreciate it" sent by employees who had just learned about the compensation plan. He replied to each message, and his eyes welled up with tears again.

CEO Jeong Il-moon Profile

Born in Gwangju in 1964
Graduated from Gwangju Jinheung High School in 1982
Graduated from Dankook University, Department of Business Administration in 1988; joined Hanshin Securities
2004: Executive Director of ECM Department, IB Division Head, IB2 Division Head, IB Department Head at Dongwon Securities
2008: Head of Corporate Finance Division and Retirement Pension Division at Korea Investment & Securities
2016: Head of Individual Customer Group and Vice President at Korea Investment & Securities
2019: President of Korea Investment & Securities (current), Non-executive Director and Audit Committee Member at Korea Exchange
2019: Outside Director and Audit Committee Member at Korea Exchange (current)
2021: Member of the Self-Regulatory Committee at Korea Financial Investment Association (current)
2021: Member of ESG (Environment, Social, Governance) Committee at Korea Investment & Securities (current)

This content was produced with the assistance of AI translation services.