The headquarters of Korea Electric Power in Naju, South Jeolla Province.
Chairman Bak Bong-su exhaled a long stream of cigarette smoke and stared up at the northern sky.
“Damn it.”
Having taken office as chairman of KEPCO seven months ago, he had made a habit of looking toward the northern sky and lamenting his lot.
Because, for him, north meant Seoul.
Roughly a year earlier, he had been tearing across the Minguk Party’s election camp, and one could say he had rendered distinguished service in Gim Sang-cheol’s presidential victory.
But who was it that said it? There are many who can share hardship, but few who can share glory...
Once the presidential election ended, a fierce struggle over appointments began within the party. Ministerial posts, nominations, and party positions were decided in order of closeness to the president. Having lost every last one of those battles for a seat at the table, he had been exiled to South Jeolla, where the air was clean and the mountains were pleasant.
“Chief Gim. What are we gathering for at today’s meeting?”
“Ah, yes... It’s to announce this year’s quarterly performance.”
“Does the chairman absolutely have to attend that?”
“...Pardon?”
“I’m not exactly someone who gets tied down by formalities. After being in America, coming to South Jeolla makes me feel like I’m suffocating. What happened with my business trip schedule to Europe?”
“The Europe trip is scheduled for sometime next month...”
“Next month is too far away. Just move it up to next week. And have them handle today’s meeting without me. Honestly, I don’t understand a word of all that talk about private power, generation facilities, and whatever else. Just tell the executives to take care of it among themselves.”
Still, this life was not entirely bad.
The chairman of a public corporation was an extremely comfortable position that paid hundreds of millions of won a year and allowed him to go on business trips as much as he pleased. Seven months had passed since he took office, yet he still had no idea how Korea’s electric power system worked, and he had no intention of learning in the future either.
The only thing on his mind was the gold badge he had left behind in Yeouido.
“Chairman, even so, I think it would be best for you to attend today’s quarterly presentation. It seems the matter of performance bonuses will come up as well.”
“What? Performance bonuses?”
“Yes. Recently, our Korea Electric Power received an A grade in the Ministry of Economy and Finance’s management evaluation. So the other executives also have very high expectations for today’s meeting.”
“Well, in that case, there’s no helping it. I’ll attend the meeting. Tell the executives to gather at once.”
He waved away the cigarette smoke and quickly stubbed it out in the ashtray.
What made this quiet country life bearable was, as expected, money—when all was said and done, money. KEPCO had recently achieved a profit for eight consecutive quarters and received favorable reviews from the Ministry of Economy and Finance, so expectations regarding performance bonuses were already overflowing internally.
A smile quickly bloomed across Bak Bong-su’s face. If a corporation’s management performance was good, was that not naturally proof of the CEO’s competence?
“Is everyone here? Then let’s cut out the useless talk and get straight to the meeting.”
Loathing being bound by formalities to an excessive degree, he cut off all preamble and asked about the main point right away.
“Head of Management Division. How are our KEPCO results?”
“Yes, Chairman. This quarter also showed a profit. With this, it marks eight consecutive quarters in the black.”
“How much did it increase?”
“For the first half of this year, operating profit increased 131% year-on-year, while net income rose by about 400%, recording a surplus of roughly two trillion won.”
“Ha ha. Very good news. What’s the reason?”
“Ah, yes. The global drop in oil prices and the increase in electricity rates drove the surplus. In addition, the recent recovery in nuclear power plant utilization rates allowed us to reduce many unit costs. However, given the reality that our accumulated deficit still amounts to 200 trillion won, and considering the high share of coal in our power generation, enormous R&D expenditures are expected going forward—”
“Enough, enough.”
The chairman waved his hand.
“Let’s take it slow. If you keep bringing up difficult things, I won’t be able to attend meetings anymore, you know?”
“M-my apologies.”
“In any case, what matters right now is that we’re in the black, yes?”
“Yes. That is correct. Eight consecutive quarters in the black, no less.”
“And we received an A in the Ministry of Economy and Finance’s management evaluation, yes?”
“Yes, yes, that is correct.”
The chairman made a satisfied face and asked,
“Then let’s hold a little feast for the first time in a while. With management performance this good, if the performance bonuses are lacking, it won’t be good for employee morale.”
“Yees... That is correct.”
“Division Head. What is the maximum management performance bonus the chairman can receive?”
The division head spoke with a troubled expression.
“To be honest... there is no clearly defined legal upper limit.”
“Is that so? Then can I receive about 1,000%?”
“T-that would be difficult. At KEPCO, we have paid roughly 200% based on internal evaluation and about 300% as a bonus according to the management evaluation.”
“That’s it?”
The chairman clicked his tongue.
“Even combined, it’s only 500%?”
“Due to the nature of a public corporation...”
“Nature, my ass. Does this make any sense? KEPCO, which had been running deficits for over a decade, has finally entered the black. And not just once or twice, but for eight consecutive quarters!”
“...”
“Then I should receive a fitting reward as well. Does it make sense to tell me to take a measly 500% and get lost?”
The KEPCO executives cautiously exchanged glances.
In truth, the reason KEPCO was recently holding a profit feast was not because Bak Bong-su’s management ability was exceptional. The biggest reason was that the previous president, who had died last year, had drastically raised electricity rates.
Over two years, he had raised electricity rates no fewer than six times, amounting to a total increase of 50% in numerical terms. Ironically, however, the administration reaping the benefits was the next one.
“Let’s do this. My performance bonus will be one thousand percent.”
“Y-yes? One thousand?”
“I’m not doing this out of personal greed. Only if I receive a lot will our executives and employees also receive large performance bonuses, no?”
“...”
“However, please observe just one thing. Gim Sang-cheol’s... No, our president’s greatest national objective is people’s livelihoods first, and people’s livelihoods second. Because of the harsh electricity rate hikes under the previous administration, our people are shedding tears of blood right now.”
“...”
“Thus, the Blue House has decided to continue freezing electricity rates. There probably won’t be any such harsh increases during our president’s term.”
Saying that, Bak Bong-su rose from his seat.
“Now that I’ve stepped back from the front lines of politics, I don’t particularly want to make an enemy of the Blue House either. So keep that in mind, and let’s receive this performance bonus as one big haul—no, let’s receive it generously.”
And so KEPCO’s performance bonus was set at an unprecedented 1,000% for the first time since the company’s founding.
*
“They’re talking damned nonsense. Tsk—”
NPS headquarters in Jeonju.
Department Head O of the Risk Management Team clicked his tongue as he looked at an official document sent by the government.
He irritably flipped through the papers, then picked up the internal phone.
“Team Leader I, come to my office for a moment.”
When I opened the door and stepped inside, Department Head O, brimming with irritation, came into view. I hadn’t caused any trouble at all lately... Had I done something wrong again?
“You called for me, sir?”
“Yeah, Team Leader I. That negotiation you went to China for this time.”
“The ten-trillion-won investment package?”
“Yes, that. What are the details?”
“The specific details are being coordinated by the Ministry of Trade, Industry and Energy, but... most of the investment funds will likely go into renewable energy projects. The investment will probably proceed in the form of our energy public corporations buying Chinese-made components. Of course, there will also be a fair amount of our pension fund directly investing in Chinese companies.”
“Damn it. So that’s why this ridiculous official document came in?”
Department Head O irritably tossed the document aside.
“...Did something happen?”
“Of course something happened. The government is telling us to buy KEPCO stock.”
“P-pardon?”
“It’s not just KEPCO. They’re telling us to invest ten trillion won across all the energy public corporations, including KPS, the Gas Corporation, and the District Heating Corporation.”
“...”
“If that were all, we’d be lucky. KEPCO is issuing bonds again. To the tune of 500 billion won. Are these bastards now planning to have us roll over government and public bonds outright?”
“...Are they telling us to buy those too?”
“Who else is going to buy them if not us? In this great boom?”
“...”
“It brings tears of blood to my eyes. In a once-in-a-century boom, what the hell are government and public bonds? No, fine, bonds are safe assets, so let’s say that’s one thing. But why on earth do we have to buy KEPCO stock?”
Department Head O had become extremely sensitive.
And with good reason: KEPCO stock was the worst. Public corporation stocks were hardly likely to do well, but this was truly the worst.
KEPCO’s stock price had peaked ten years ago, when it sold its Samseong-dong site to Asan Motor Group for around ten trillion won. Back then, the stock had been above 50,000 won, but recently it was at 40,000 won. Surprisingly, that was a figure that had roughly doubled(?) compared to a year ago.
Just one year earlier, it had been 20,000 won, less than half its price ten years ago. At this point, rather than a stock, it was practically a “patriotic bond.”
“It has no prospects. None at all. Seeing how they froze electricity rates, this administration doesn’t seem to have any intention of raising them during its term either!”
The reason KEPCO, which monopolized the domestic energy business, had fallen to the level of a patriotic bond like this was due more to political factors than management. Previous administrations had used people’s livelihoods as an excuse not to raise electricity rates. That was, in effect, the entire reason.
As a result, KEPCO’s total liabilities surpassed 200 trillion won, the bonds they issued became close to robbing Peter to pay Paul, and whenever their funding situation became tight, they demanded interest-free loans from the pension fund.
“Calm down, sir. Still, the mood at KEPCO seems good lately.”
“That’s even more of a problem! I saw on the news yesterday that these bastards held a performance bonus feast. The chairman received 1,000%, and the people below him received corresponding amounts.”
“They had eight consecutive quarters in the black and an A in the management evaluation, so...”
“They only earned a measly two trillion. With total liabilities of 200 trillion, their annual interest costs alone are close to five trillion, and they’ve only just earned two trillion. They still can’t even pay the interest with that money!”
Department Head O’s hands trembled.
“Damn it. In the end, if they don’t raise electricity rates, the current 40,000-won stock price will plunge back to 20,000 won, and my blood is really boiling. Are we supposed to buy a stock that’s clearly going to fall?”
“...”
“Forget it. What’s the point of complaining to you? Send the government directive down to the risk team by the end of the day and fill the quota.”
I said,
“Sir. If we’re going to buy more shares anyway, couldn’t we buy a bit more?”
“What?”
“If we’re investing broadly in energy public corporations, ten trillion won isn’t that much money. In that case, how about investing around twenty trillion won instead?”
“What kind of nonsense are you spouting now? That stock is going to be cut in half in five years.”
“Well, that remains to be seen.”
“...No. Don’t do anything strange. KEPCO’s market cap is 25 trillion won, and even if you add up all the other energy public corporations, it probably won’t even reach 50 trillion. What do you mean, twenty trillion? Where would you even get that volume?”
“We can ask the largest shareholder to sell.”
Department Head O raised his eyebrows.
“What?”
“Korea Development Bank, which holds 51% when combined with the government’s stake. I’ll try to push for a block deal with them and convey our interest in buying.”
“That’s absurd. They’re holding a majority to secure management control. Do you think they’ll sell to us? And you bastard, we should be thinking about buying even one won less right now. What do you mean, increase our stake?”
“Come on. The pension fund’s stake is always a friendly stake for the government. I’ll try to push it forward.”
“Hey, what’s gotten into you?”
I answered in a tone filled with certainty.
“I think KEPCO stock is going to skyrocket. It seems to have prospects.”