Public Institution Management Evaluation 'Below Unsatisfactory' 18 Sites Receive Zero Performance Bonuses... KEPCO and 9 Subsidiaries Voluntarily Return Bonuses (Update)

[Asia Economy Sejong=Reporter Kim Hyewon] In the government's public institution management evaluation, 18 institutions received a rating of 'Below Unsatisfactory' or lower. These institutions will have their performance bonuses fully cut, and their operating expenses for the next year will be reduced by about 0.5 to 1%. Among the three institutions rated 'Very Unsatisfactory (E)', the head of the Korea Maritime Transportation Safety Authority was recommended for dismissal. Korea Electric Power Corporation received a 'Normal (C)' rating, but considering its large-scale deficit, the government recommended that the heads, auditors, and standing directors of each institution, including nine subsidiaries, voluntarily return their performance bonuses.

On the 20th, the Ministry of Economy and Finance held the 7th Public Institution Management Committee chaired by Second Vice Minister Choi Sang-dae, where they deliberated and approved the '2021 Public Institution Management Performance Evaluation Results and Follow-up Measures (Draft)'.

The public institution management evaluation is an annual event where 109 private experts, including professors, accountants, and lawyers, evaluate the management performance of 130 public enterprises and quasi-governmental institutions, as well as the job performance of auditors in 63 public institutions.

Among the 130 target institutions, Korea East-West Power was the only one to receive the comprehensive grade of 'Excellent (S)'. The evaluation team noted that East-West Power achieved results in implementing social values such as disaster safety accident prevention and ethical management, and also received high scores in major projects such as stable operation of power generation facilities.

Besides this, 23 institutions were rated 'Outstanding (A)', 48 'Good (B)', 40 'Normal (C)', 15 'Unsatisfactory (D)', and 3 'Very Unsatisfactory (E)'.

On this day, the Public Institution Management Committee recommended the dismissal of one currently serving head (Korea Maritime Transportation Safety Authority) among the eight institutions rated Very Unsatisfactory (E) or Unsatisfactory (D) for two consecutive years. The other seven institutions were excluded from dismissal as their heads had served less than six months as of the end of last year or their terms had already expired. The other E-rated institutions are the Korea Post Logistics Support Group and Korea Railroad Corporation. Institutions that received a D rating for two consecutive years include the National Institute of Ecology, Korea Construction Machinery Safety Management Institute, Korea Racing Authority, Korea Creative Content Agency, and Korea Land and Housing Corporation.

Among the 15 institutions rated Unsatisfactory (D), three heads (Korea Forest Welfare Institute, Korea Youth Activity Promotion Agency, Korea Land and Housing Corporation) who met the requirement of serving more than six months were issued warnings. Warnings were also issued to 13 of the 14 heads currently serving at institutions where major accidents occurred.

Regarding the evaluation results of standing auditors and audit committee members in 63 institutions, 6 were rated Outstanding (A), 34 Good (B), 20 Normal (C), and 3 Unsatisfactory (D). The three auditors who received a D rating (Korea Coal Corporation, Korea Inclusive Finance Agency, Korea Occupational Safety and Health Agency) were issued warnings.

The Ministry of Economy and Finance and the relevant ministries will receive improvement plans from the 18 institutions with poor performance (D and E ratings) and the 14 institutions where major accidents occurred, and will monitor the implementation status. For the 18 institutions rated Unsatisfactory or below (D and E), operating expenses for the next year will be cut by 0.5 to 1%. Performance bonuses will also be paid differentially according to the rating and type. Institutions rated D and E will have a 0% performance bonus payment rate.

The government plans to reduce the weight of social value in future public institution management evaluations and strengthen financial performance indicators. The government will form a public-private joint task force (TF) to discuss reform plans for the management evaluation system in July and August. The reform plans will be reflected starting from the 2022 management evaluation manual.

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