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.
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]