"A 600 Million Won Bonus?" A One-Shot Windfall Worth 14 Years of Salary ... Samsung's Massive Payout Leaves Workers Stunned

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[Financial News] The tentative wage agreement that Samsung Electronics Co., Ltd. (SEC) reached just before a worst-case total strike has sent shockwaves through Korea's labor market and left behind a serious challenge for society.
According to industry sources on the 25th, the core of the tentative agreement signed by labor and management on the 20th is the creation of a new Special Management Performance Bonus for the semiconductor (Device Solutions division), funded by 10.5% of business performance, or operating profit.
If this system is implemented over the next 10 years with no cap on payouts, employees in the Memory Business, which drives performance, could receive up to 550 million won a year in Special Management Performance Bonus alone, based on annual business performance of 300 trillion won. Adding the existing Performance Incentive (OPI) cap of 50% of annual salary, or about 50 million won, means they could collect as much as 600 million won in bonuses alone, opening an era of 700 million won in pre-tax total compensation.
That is seven times the average annual salary at major Korean companies, which stands at 102.8 million won, and an astonishing 14 times the average wage of all regular workers, which is 50.61 million won. The problem is that this "operating profit N%" bonus model is expected to deepen the labor market's K-shaped divide to an extreme degree.
For most small and mid-sized firms, which struggle even to secure funds for facility investment and Research and Development (R&D), such compensation plans are unthinkable, except for a tiny number of IT and semiconductor giants such as Samsung Electronics Co., Ltd. (SEC) and SK hynix that are enjoying a boom.
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For workers at microbusinesses with fewer than 30 employees, where unionization stands at just 0.1%, this is a story from another world. Scholars warn that unless the primary contractor unions show inclusiveness by embracing subcontractors and other vulnerable workers in the labor market, social conflict will grow out of control.
The bigger issue is the severe labor-versus-labor conflict that has erupted inside SEC. Under the agreement, the Memory Business is expected to receive bonuses in the 600 million won range, while the DX (Device eXperience) Division is likely to get only around 50 million won at best, intensifying internal resentment.
Behind the Memory Business's dominance were contributions from foundry and System LSI, while the historical interdependence was ignored, including the period when the DX (Device eXperience) Division helped defend the company's overall results during the semiconductor division's losses. Sustainable growth for a top-tier company cannot be secured by the dominance of a single division alone.
The most urgent task facing both labor and management is to restore the damaged spirit of "One Samsung" by introducing complementary measures such as a companywide common performance pool that recognizes the organic contributions of each division.
jsi@fnnews.com Junsangil Reporter