Hyundai Marine & Fire Insurance(001450) It was found that the labor union demanded 10% of net income as management performance bonuses. The management accepted part of the union's demand and is reviewing an appropriate payout ratio.
According to the insurance industry on the 3rd, the labor and management at Hyundai Marine & Fire Insurance discussed a plan to pay management performance bonuses in the ongoing wage and collective bargaining talks. The management said it would be difficult to accept the union's demand for 10% of net income, but is reportedly reviewing a plan to allocate a certain percentage of net income separately as funding for management performance bonuses.
The securities community expects Hyundai Marine & Fire Insurance's net income this year to be around 1.1495 trillion won. As of the end of the first half of this year, Hyundai Marine & Fire Insurance had 3,918 employees, and if 10% of net income is allocated as the performance bonus pool, a simple calculation suggests about 29.34 million won per person would be paid.
Hyundai Marine & Fire Insurance had allocated a portion of net income to the performance bonus pool until the new accounting standard (IFRS 17) took effect in 2023. However, after the introduction of the new standard and as the financial authorities pointed out the possibility that insurers could inflate results based on optimistic actuarial assumptions and called for improvements, the company reportedly temporarily halted the related allocation to minimize uncertainty.
This situation is also said to have influenced Hyundai Marine & Fire Insurance not paying performance bonuses this year based on the previous year's job evaluations.
In response, the union has reportedly asked the management for a performance bonus plan in line with the new accounting regime. This year's management performance bonus plan is expected to be decided in the third quarter along with the wage increase rate. A Hyundai Marine & Fire Insurance official said, "In the case of performance bonuses, it is at the discretion of the management rather than a matter of agreement, but we are reviewing the payout plan while gathering the union's views."