All HGST employees,
Earlier this year, we approved salary increases for direct labor employees (such as operators in our factories) and where legally required. For all other employees, we delayed final approval of planned salary increases while we assessed market conditions. In times of market uncertainty, it’s critical that we make smart decisions and maintain spending at sustainable levels. For more detail on market conditions, please see Mike Cordano’s blog on Q3 results.
Final decisions have now been made, and we will move forward with a modest reduction in the salary increase budget. While this is really good news for most employees, we had to make some tough decisions in order to decrease our spending.
To operate within a reduced salary increase budget, we looked first to the compensation of the leaders of our company. We decided not to award 2015 salary increases for Global Directors and above (levels GG, SG, IH and higher). Secondarily, we are not increasing 2015 salaries for employees whose current pay is already very competitive as compared to the local market.
For all other employees, plus a small number of business-critical exceptions, salary increases and promotions have been approved as originally planned. Salary increase effective dates will be July 1 (outside the U.S.) or July 4 (U.S.).
We work hard to maintain market-competitive compensation and believe this approach strikes the right balance. As Mike Cordano said in his recent blog, “We have to be prudent at all times, but especially during market transitions, to ensure we are best positioning the company and our employees for continued success.”