According to daily Parkiet, KGHM has hiked the gross wages of its managers by 15-35% in average annualized terms, while at the same time increasing the motivational, performance-dependant part of the remunerations. This decision has annoyed KGHM’s labour unions, which have been fighting unsuccessfully for a universal wage hike of PLN 300 per employee for several years now. The average wage at KGHM will amount to PLN 9,031 gross in 2011.
Our view:
We view the news neutrally in terms of today’s trading. We do not expect the news to fuel unrest among the ordinary miners at the company. The above-mentioned pay hikes do not cover all of the company’s middle management, only those who are considered eligible to receive a pay increase. We expect the impact on personnel costs to be negligible.
[Buy, Fair Value 212.20 PLN]