AU Optronics Cuts Pays for Senior Executives

Nov 02, 2011 Ι Industry In-Focus Ι Electronics and Computers Ι By Philip Liu, CENS
facebook twitter google+ Pin It plurk

Taipei, Nov. 2, 2011 (CENS)--In response to its huge red ink, AU Optronics (AUO), Taiwan's leading FPD (flat panel display) maker, will cut the pays of its president and vice presidents by 15%, as a demonstration of their responsibility.

AUO is the first domestic firm to resort to the practice during the current business slowdown. Many other hi-tech firms, which have also suffered huge deficit, haven't had salary adjustment plans so far, including Chimei-Innolux, Powerchip, Nanya Technology, and Inotera.

AUO's pay cut will affect 16 senior executives, including the president and 15 vice presidents, enabling the company to save NT$8 million a year. Whether the pay cut will spread to medium-level managerial staffers will hinge on the future development of the business trend.

AUO pointed out yesterday (Nov. 1) that although failure to achieve the business goal can be partly blamed on the adverse overall environment, managerial staffers should bear some responsibility. Directors, supervisors, and employees ranking below vice presidents are not subject to the pay cut. K.Y. Li, chairman, is also excluded, since he is not a managerial staffer and only collects compensation for directors.

During the global financial tsunami in 2008, the company's managerial staffers ranking above vice manager received pay cut of 10% and basic-level engineers took unpaid leave. The practice was terminated along the recovery of the economy in the second half of 2009.

In addition to pay cut, AUO also actively controls cost, such as reduction of unnecessary business travel, but R&D spending will not be reduced.
©1995-2006 Copyright China Economic News Service All Rights Reserved.