88% of Team Leaders at Major Hanwha Group Affiliates Prefer Stocks Over Allowances

Hanwha Expands RSU System to Team Leader Level

Hanwha Group is expanding the Restricted Stock Unit (RSU) system to include team leaders of major affiliates.

Hanwha Building, Janggyo-dong, Seoul.

On the 18th, Hanwha Group announced that it will expand the RSU system, which has been operated for CEOs and executives, to team leaders of major affiliates.

This comes four years after the RSU system was first introduced in 2020 among domestic listed companies to promote responsible management and enhance shareholder value. The RSU system is a long-term compensation plan that grants shares upon meeting certain conditions such as a vesting period, aiming to encourage employees to focus on the company's long-term growth.

The RSU for team leaders will be initially introduced for 1,116 team leaders across five major affiliates: Hanwha Corporation, Hanwha Aerospace, Hanwha Systems, Hanwha Ocean, and Hanwha Solutions.

There are some differences from the existing RSU. While executives receive RSUs instead of bonuses, team leaders can choose a new RSU system called the "Leader Incentive" instead of the existing team leader allowance. The vesting period is set shorter at three years compared to the previous 5 to 10 years. Fifty percent of the granted amount is paid in shares and the other 50% in stock price-linked cash, which is the same as the executive RSU system.

The Leader Incentive system is optional and only available to those who wish to participate. Team leaders can choose whether to continue receiving the existing team leader allowance in cash or to receive RSUs, whose expected value varies according to the company's future value growth.

Last month, Hanwha held briefing sessions on the Leader Incentive system for each affiliate, and allowed free choice of conversion in early July. Among the 1,116 team leaders in the five targeted affiliates, 976, about 88%, chose the Leader Incentive instead of the existing team leader allowance. The company views the nearly 90% selection rate as reflecting a sense of ownership in participating in the company’s growth and development, as well as a positive outlook on future value appreciation.

Son Myung-soo, Executive Director of Hanwha Talent Management Institute, said, "The expanded Leader Incentive system for team leaders is designed to provide a foundation for employees to take ownership and immerse themselves in the company’s future value growth and development." He added, "Since many team leaders have voluntarily chosen this, we expect the company to continue growing based on their exemplary leadership and sense of ownership."