▲ Micron
U.S. memory chipmaker Micron has accepted the demands of its labor union in Taiwan to establish a profit-linked quarterly performance bonus system, which will be applied to employees worldwide.
According to local media reports including the Economic Daily News and The Liberty Times on October 22, Micron announced that starting from the fiscal year 2027, it will introduce a quarterly performance bonus scheme tied to company profits, operating separately from the existing annual performance bonus.
The new quarterly performance bonus will be paid half in cash and half in stock.
Cash will be distributed following quarterly earnings announcements, while stock will be accumulated on a quarterly basis and paid out annually.
The amounts will be calculated by reflecting the company's profitability and employee performance evaluations.
Payment amounts will be calculated after subtracting capital expenditures required for the following quarter from net income after taxes, and distributed differentially based on individual employee performance reviews.
Employees who receive ratings of "exceeds expectations" or "greatly exceeds expectations" in their performance evaluations can receive 110 percent of the standard quarterly bonus calculation amount.
A "meets expectations" rating will apply 100 percent, while a "needs improvement" rating will apply 35 percent.
However, specific calculation formulas, such as what percentage of total profits the company allocates as bonus financial resources, have not been disclosed.
The company explained that the system was designed so that employees can share in the company's profits while securing long-term investment resources.
Lu Dong-hui, chairman of Micron Taiwan, stated that while this restructuring originated from the demands of labor unions in Taoyuan and Taichung, Taiwan, it will be applied equally to employees worldwide.
Lu explained that the union's core demand lay in enhancing the transparency and predictability of the performance bonus system, and that the system overhaul was pursued after obtaining board approval.
He particularly emphasized that the quarterly performance bonus is newly established separately and does not divert financial resources from the existing annual performance bonus.
Lu added that the existing annual performance bonus will focus on long-term research and development and achieving strategic goals to prevent an over-reliance on short-term profitability.
Micron also announced additional compensation improvement measures for its employees in Taiwan.
It plans to increase paid leave by three days, raise the contribution rate for the retirement pension, and pursue structural wage increases to alleviate wage inversion phenomena between new recruits and long-term employees.
Related measures aim to be completed by the second quarter of fiscal year 2027, with plans to implement them before the Lunar New Year next year if possible.
This decision comes amid conflicts between management and the labor unions at Micron's Taichung and Taouyan plants in Taiwan, who had been demanding improvements to the performance bonus system and better treatment.
While the Taichung plant union reached an agreement with Micron on various issues on October 21 and withdrew its originally scheduled labor dispute mediation procedures, the Taouyan plant union failed to narrow differences over profit-sharing and launched a 24-hour strike starting at 9 a.m. today.
The Taouyan plant union reportedly demanded a system that distributes 15 percent of operating profit as quarterly performance bonuses, citing the examples of Samsung Electronics and SK hynix.
(Photo: Getty Images)
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