Micron’s reward system is undergoing major reform! Newly added quarterly profit sharing bonus, IPP maximum bonus rate reaches 500%

Memory giant Micron signed a labor agreement with the Taichung labor union yesterday (21st). Taiwan Micron today (22nd) explained the reward and welfare reform plan. Starting from the 2027 fiscal year, a new quarterly profit sharing bonus will be added in parallel with the original incentive bonus plan (IPP). The profit sharing bonus will be 50% cash and 50% stocks. For those with the highest personal performance, the IPP bonus multiplier can be up to 500%. In addition, Micron will also increase the retirement allowance rate for Taiwanese employees to 10%, increase paid leave, and make structural salary adjustments.

Lu Donghui, chairman of Micron Taiwan, said that after obtaining authorization from the board of directors in October to promote the reform of the salary system, the union's core demand is that bonuses should be predictable, highly transparent, and institutionalized. Since Micron adopts the principle of global consistency, the new quarterly dividend and the new version of IPP are not only applicable to Taiwan, but also extended to qualified employees around the world.

Lu Donghui pointed out that the new quarterly profit-sharing bonus is an additional bonus in addition to the original IPP system. The calculation of the bonus will be based on the net profit after tax minus the estimated capital expenditure for the next quarter, and the 2026 fiscal year as the benchmark, so that employees can understand the changes in the bonus pool based on public financial report information. In other words, as the company's profits increase, the bonus will also increase, but considering capital expenditure and investment needs, it will not increase in equal proportions.

In terms of distribution method, the quarterly profit sharing bonus will be 50% cash and 50% stocks. 50% of the cash will be distributed after the quarterly report is released, and the other 50% will be distributed in the form of stocks, which will be accumulated on a quarterly basis and distributed annually. Micron pointed out that this system hopes to take into account employees' immediate cash needs and the opportunity to share the company's long-term growth results.

Micron is also simultaneously reforming the original IPP system. Lu Donghui explained that the original IPP included profit targets and company strategic goals. Future profit performance will be reflected by the quarterly profit sharing mechanism. IPP focuses on the company's strategic goals to take into account long-term research and development and investment needs. The upper limit of the reward rate for achieving strategic goals will be increased from 200% to 250%. For those with the highest personal performance level, the IPP bonus rate can be up to 500%, and for the next highest performance rating, it can be up to 350%. However, these numbers represent the highest reward multiples designed by the system and are not applicable to all employees.

In terms of employee benefits in Taiwan, Micron Taiwan will adjust day shift, night shift and related shift subsidies, add 3 days of paid leave, and increase the employer's retirement contribution rate from 8% to 10%. It will also conduct structural salary increases to improve the salary gap between existing employees and new employees. The goal is to complete it before the second quarter of the 2027 fiscal year, and hopes to advance it to the end of the Lunar New Year.