Flat-panel manufacturer AU Optronics Corp (AUO, 友達光電), which has suffered losses for three consecutive quarters this year, yesterday confirmed that senior executives would take a 15 percent pay cut for the rest of the year, a move that would save the firm more than NT$8 million (US$265,900).
AU Optronics made the disclosure after reporting a loss of NT$15.8 billion in the third quarter and total losses of NT$40.5 billion in the first three quarters. The company said it did not publicize the plan earlier because it was an internal affair to show that management was taking responsibility for its performance.
AU Optronics officials said that 16 senior executives, including chairman Lee Kun-yao (李焜耀) and vice chairman Chen Hsuan-bin (陳炫彬), would take salary cuts.
There were no reports of Chimei Innolux Corp (奇美電子), another major Taiwanese flat-panel maker that has also reported huge losses so far this year, planning to cut senior executives’ salaries.
Chimei Innolux on Monday reported a fifth straight quarterly loss of NT$17.26 billion for the third quarter, with net losses of NT$44.45 billion for the first three quarters of the year.
Neither AU Optronics nor Chimei Innolux has set in motion any plans to cut costs by asking employees to take unpaid leave.
A day earlier, the legislature’s Social Welfare and Environmental Hygiene Committee passed a proposal asking CEOs and board directors of companies that have asked employees to go on unpaid leave to slash their compensation based on the percentage of workers forced to take leave and the earnings that these workers stand to lose.
The proposal also urges companies to compensate employees they have temporarily furloughed once the company regains profitability.
Council of Labor Affairs Minister Jennifer Wang (王如玄) expressed hope that the issue of compensation would be addressed in labor-management negotiations regarding furloughs.
The issue resurfaced in Taiwan when the country’s biggest LED manufacturer, Everlight Electronics Co (億光電子), said on Wednesday last week that it would ask workers to go on unpaid leave. However, the company reversed its decision a day later in the face of strong public criticism.
The issue of unpaid leave is particularly sensitive in Taiwan because the practice became widespread during the global financial crisis in late 2008 and the first half of 2009 and resulted in charges of abuse against several large employers.
Separately, AU Optronics yesterday said it had made “appropriate provisions” related to a fine imposed by South Korea’s Fair Trade Commission in an antitrust case, with no impact on the current quarter’s results, according to a stock exchange statement.
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