Micron Plans Quarterly Bonus System

The Taichung plant union reached agreement with management on several key issues on Oct. 21. (Yonhap) U.S. memory semiconductor company Micron will introduce a new quarterly bonus system linked to company profits starting from the 2027 fiscal year. Although it originated from the demands of Taiwanese labor unions, it applies to employees worldwide. According to local media such as the Taiwan Economic Daily and Minbo on Oct. 22, Micron released a system reorganization plan containing these details on this day. The quarterly bonus will be operated separately from the existing annual bonus. The payment will be made half in cash and half in stock. The cash will be paid after the quarterly earnings announcement, and the stock will be accumulated quarterly and paid on an annual basis. The payment amount is calculated based on the net profit after tax minus the capital expenditure for the next quarter, and will be paid differentially according to each employee’s performance evaluation. The ‘exceeds expectations’ or ‘greatly exceeds expectations’ grades will receive 110% of the standard amount calculated for the quarterly bonus, the ‘meets expectations’ grade will receive 100%, and the ‘needs improvement’ grade will receive 35%. However, the specific calculation formula, such as what % of the profit will be allocated as the financial source for the bonus, was not disclosed. The company explained that it was designed so that employees can share profits while securing financial resources for long-term investment. Donghui Lu, Chairman of Micron Taiwan, stated that this reorganization originated from the demands of labor unions in the Taoyuan and Taichung regions of Taiwan, and that increasing the transparency and predictability of the bonus system was the unions’ core demand. Chairman Lu, who emphasized that the quarterly bonus is a newly established separate portion and not a diversion of the financial resources for the annual bonus, added that the annual bonus will be operated with a focus on achieving long-term research and development and strategic goals so as not to lean toward short-term profitability in the future. Micron also released measures to improve the treatment of Taiwanese employees. It will increase paid leave by three days, raise the retirement pension accumulation ratio, and also promote structural wage increases to alleviate the wage inversion between new and long-term employees. The goal is to conclude this by the second quarter of the 2027 fiscal year, and if possible, it plans to implement it before the Lunar New Year next year. This announcement came amid a conflict with the management as the labor unions of the Taichung and Taoyuan plants in Taiwan demanded bonuses and improved treatment. On Oct. 21, the labor union of the Taichung plant reached an agreement with the management on several issues and withdrew the scheduled labor dispute mediation procedure. On the other hand, the labor union of the Taoyuan plant went on a 24-hour strike starting from 9 a.m. on this day as differences over profit distribution could not be narrowed. It is known that the Taoyuan union mentioned the cases of Samsung Electronics and SK hynix and demanded that 15% of the operating profit be distributed as a bonus every quarter.