Salary Increase Trends in Korea

April 30, 2004

- AMCHAM Presentation Material -

W A T S O N W Y A T T

Table of Contents

• Salary Increase Rate

• Salary Increase Rate – by Industry

Salary Increase Rates Salary Increase Rates

Executive CompensationExecutive Compensation

• Top Management

• Senior Management

3

Salary Increase Rates

Salary Increase rate has been steadily decreased since 2000.

0.0

5.0

10.0

15.0

Inflation Rate 2.3 4.1 3.0 3.5 2.8

Salary Increase Rate 10.2 9.9 9.2 7.8 7.7

2000 2001 2002 20032004

(Forecast)

Inflation Rate

• The statistics for the year 2004 are forecasts• Sources: The Bank of Korea

Watson Wyatt 2003-2004 Strategic Rewards Survey Reports (As of July 1, 2003)

(Unit: %)

Salary Increase Rate

Salary Increase and Inflation Rates in Korea

4

0.0

5.0

10.0

15.0

Hi- tech 11.0 11.0 6.7 6.4 7.3

Consumer 9.8 10.2 11.3 7.9 8.0

Indus try 9.5 7.2 8.2 8.4 7.5

Health Care 10.9 10.2 11.2 9.5 8.6

2000 2001 2002 2003 2004

( Unit: %)

Salary Increase Rates (cont’d)

Salary Increase Rates - by Industry

• The statistics for the year 2004 are forecasts• Sources: Watson Wyatt 2003-2004 Strategic Rewards Survey Reports (As of July 1, 2003)

Health care industry exhibits the highest salary increase rate, and industrial exhibits the lowest salary increase rateamong hi-tech, consumer, industrial, and health care industry. Salary Increase rate of Hi-tech industry decreased sharply between 2001 and 2002 due to burst of the IT bubble.

Hi-tech

ConsumerINdustry

Health Card

5

Table of Contents

• Salary Increase Rate

• Salary Increase Rate – by Industry

Salary Increase Rates Salary Increase Rates

Executive CompensationExecutive Compensation

• Top Management

• Senior Management

6

50,000

100,000

150,000

200,000

25%ile 50%ile 75%ile

Hi- TechConsumerIndustrialHealth Care

Executive Compensation

Top Management* Total Cash - by Industry

* Top Management: Highest executive positions in organizations (General Managers, Vice Presidents)• Sources: Watson Wyatt 2003-2004 Strategic Rewards Survey Report (As of July 1, 2003)

(Unit: 1,000 KRW)

7

50,000

100,000

150,000

200,000

25%ile 50%ile 75%ile

Hi- TechConsumerIndustrialHealth Care

(Unit: 1,000 KRW)

Executive Compensation (cont’d)

Senior Management* Total Cash - by Industry

* Senior Management: Head of functions or executive positions (Senior Executives, Directors)• Sources: Watson Wyatt Strategic Rewards Survey Report (As of July 1, 2003)