Hanwha Group extends RSU to all affiliates

South Korea’s Hanwha Group announced on Wednesday that it will extend the restricted stock unit (RSU) to its all affiliates. Next year, RSU will be granted up to the team leader level.

RSUs are an award of stock shares, usually given as a form of employee compensation. These are issued to employees through a vesting plan and distribution schedule after they achieve required performance milestones or upon remaining with their employer for a particular length of time.

As the stock price and compensation are linked, it helps boost employee motivation and enhances shareholder value through improved performance.

However, if the stock price at the time of the grant is lower than the current price, the size of the reward may decrease, and the grant itself may be canceled depending on factors such as the employee's responsibility. Hanwha is granting RSUs for five to a maximum of ten years.

In 2020, Hanwha Group introduced the RSU scheme first time in the domestic market starting with executives from Hanwha Corp., Hanwha Aerospace Co., and Hanwha Solutions Corp.

Next year, team leader-level employees can choose between cash compensation and RSUs.

Write to Hyung-Kyu Kim at khk@hankyung.com