Hanmi Pharmaceutical Group has embarked on restructuring its compensation system to secure outstanding talent.
The holding company Hanmi Science and its core subsidiary Hanmi Pharmaceutical announced on the 1st that they will introduce a "stock-based performance compensation system" for employees.
The company's intention is to provide strong motivation to employees and further solidify a performance-oriented organizational culture. The company explained that it is a strategic decision to attract highly competitive talent and establish a global-level performance compensation system.
This stock-based compensation system is expected to operate in two main forms: Restricted Stock Award (RSA) and Restricted Stock Unit (RSU).
RSA is a method that allows employees to receive their performance-related compensation in company stock. Employees can choose to receive 50% to 100% of their performance incentive amount in company stock based on biannual evaluation results. The company will separately compensate for any potential losses from falling stock prices to reduce the burden on employees.
RSU is compensation for performance that contributes to the long-term value increase of the company. If significant increases in revenue or profits, new drug approvals, and technology exports are achieved—performance that greatly impacts corporate value—employees who contributed to this will be awarded company stock worth up to 100% of their annual salary.
In the industry, there is a perspective that this is an alternative to soothe employees' morale following internal discord after a management dispute between the founder's family and relatives. Recent news indicated that Mr. Shin Dong-guk, the largest shareholder of Hanmi Science, urged personnel reductions and excessively intervened in areas such as research and development and quality control.
The company stated that the major shareholders will be excluded from the system. The system will apply to employees of major subsidiaries, including Hanmi Science, Hanmi Pharmaceutical, online pharmacy OnlineFarm, and Hanmi Precision Chemical, which specializes in active pharmaceutical ingredients (APIs) as of the implementation date.
Hanmi Group expressed hope that this compensation system will allow the company and its employees to focus on shared goals and share performance, thereby laying the foundation for sustainable growth. The implementation of the system will be finalized after the detailed operational plan is confirmed and approved by the board of directors.
Kim Jae-kyo, CEO of Hanmi Science, said, "In the increasingly competitive pharmaceutical and biotechnology industry, a performance-oriented compensation system is an essential condition for securing the company's future competitiveness. Through this system, we will attract global top talent and foster a culture of shared growth with a sense of ownership among all employees, thereby realizing sustainable corporate value."