TWSE launches Taiwan Top Salary 100 Index

2014-08-27

Taiwan Top Salary 100 Index was launched Aug. 25 in Taipei City, highlighting government efforts to promote corporate social responsibility.

The new index, a joint initiative of Taiwan Stock Exchange Corp. and Research Affiliates LLC, tracks the performance of Taiwan’s 100 highest salary paying companies. It is the first of its kind in the world.

A total of 53 percent of the index’s underlying stocks are in the electronics sector, followed by the traditional manufacturing and financial sectors at 31 percent and 16 percent, respectively.

Financial Supervisory Commission Minister Tseng Ming-chung said by spotlighting underlying stocks, the index will encourage the corporate sector to use a larger portion of profits for increasing employee benefits and investing in R&D activity.

“We will continue working with the TWSE on similar initiatives,” Tseng said, adding that one such measure involves a corporate governance index set for launch in June next year.

The index is one of three corporate social responsibility indicators compiled by the company. It is expected to help promote social goals and provide more options for Taiwan institutional investors seeking passive investment strategies.

Top five component stocks on the index are Taiwan Semiconductor Manufacturing Co. Ltd., Hon Hai Precision Ind. Co. Ltd., Chunghwa Telecom Co. Ltd., Fubon Financial Holding Co. Ltd. and CTBC Financial Holding Co. Ltd.

According to TWSE, the companies are chosen based on their employee salaries, benefits and after-tax profits from 2011 to 2013. The index is subject to review every June, with the components adjusted in accordance with three-year moving average performances.

The index is calculated on component prices as of Aug. 11 and has a base level of 5,000 points. Analysis shows the annualized return at 10.56 percent from June 2009 to May 2014, exceeding 9.3 percent for the overall benchmark TAIEX.

Source: Taiwan Today (http://taiwantoday.tw/ct.asp?xItem=221039&CtNode=413)