Samsung Electronics to Pay Semiconductor Special Bonuses for 10 Years, Including to Loss-Making Units

\r\n
[Financial News] Samsung Electronics and its labor union reached a tentative agreement on the afternoon of the 20th over the distribution of special management performance bonuses for the Memory Business, a major profit center, and the System LSI Division and Samsung Foundry Division, both of which are in the red. The deal sets the split at 40% for common payments by division and 60% for business-unit payments. It appears to be a compromise that reflects the widening performance gap between the memory and non-memory businesses.■ A 40-60 split, with the union to hold a voteThe union has temporarily put off a general strike and will hold a vote among members on the tentative wage agreement for 2026 from 2 p.m. on the 22nd to 10 a.m. on the 27th.
The company and the union agreed to keep the existing system for the performance incentive, or OPI. The cap remains at 50% of annual salary. For the Samsung Electronics Device Solutions Division (DS), the bonus will be 10% of business performance, or operating profit. For the Samsung Electronics DX Division, it will be either 10% of business performance or 20% of Economic Value Added (EVA), to be selected later.
The key point of the deal is the creation of a special management performance bonus for the DS division. Under the agreement, the funding for the bonus was set at 10.5% of business performance, as jointly agreed by labor and management, and no payout cap will be imposed. When the OPI and the special management performance bonus are combined, the total is estimated at 11.5% to 12% of operating profit.
The special management performance bonus will be divided into 40% for the division and 60% for the business unit. In simple terms, the Memory Business, which is generating large profits, will receive the 40% allocated to the division plus the additional 60% allocated to the business unit. By contrast, loss-making units will receive only the 40%. For the 2026 payout, which will be based on this year's results and paid next year, the common payment rate will exceptionally be set at 100%. From the 2027 performance year onward, however, only 60% of the common payment rate will apply. The common organization payment rate was set at 70% of the Memory Business rate.
The special management performance bonus will be paid in Samsung Electronics shares. One-third of the shares can be sold immediately, while sales of the remaining two-thirds will be restricted for one and two years, respectively.
\r\n\r■ Special management performance bonus to be applied for 10 yearsLabor and management agreed to apply the special management performance bonus system for the next 10 years. From 2026 to 2028, the bonus will be paid each year if the DS division reaches 20 trillion won in operating profit. From 2029 to 2035, it will be paid if DS operating profit reaches 10 trillion won. The agreement also includes Samsung Electronics shares worth 6 million won for the DX division and the CSS Business Team.
On wages, the two sides agreed to a base pay increase of 4.1% for this year and an average performance-based increase of 2.1%. The performance-based increase will be applied differently depending on career level and evaluation results. The package also includes welfare measures such as the introduction of an in-house housing loan program, higher childbirth incentives, and a higher salary cap.
The childbirth incentive will be raised to 1 million won for the first child, 2 million won for the second, and 5 million won for the third child and beyond. The salary cap for CL4 employees will rise to 130 million won from the current 122 million won, regardless of whether they are in development or non-development roles.
Earlier, the Samsung Electronics joint struggle committee announced to members that "the general strike scheduled from May 21 to June 7 will be suspended until further notice." The union had originally threatened a general strike, demanding the institutionalization of performance bonuses and the removal of payout caps. However, after last-minute negotiations produced a tentative agreement, the strike plan has been put on hold for now. A vote on the agreement will be held from 2 p.m. on the 22nd to 10 a.m. on the 27th.
soup@fnnews.com Im Su-bin, Jo Eun-hyo Reporter