"Even in the red, they pocket 200 million won; in the black, just 500,000 won?"... Furious Samsung Electro-Mechanics and SDI say, "Let's strike too"

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[Financial News] The 'special management performance bonus' agreement reached at the last minute between labor and management at Samsung Electronics Co., Ltd. has emerged as a flashpoint that could shake the entire Samsung Group.
\r\nThe worst-case scenario of a strike in the Device Solutions Division was avoided, but the huge gap in bonuses created by the deal has sparked strong backlash from employees at other affiliates and is now fueling a new round of labor unrest.
The issue began with the tentative agreement announced on the 20th between Samsung Electronics and its labor union. Under the deal, the Device Solutions Division will receive a special management performance bonus paid entirely in company stock if operating profit targets are met. If the division reaches 30 trillion won in operating profit this year, employees in the memory business could receive compensation worth around 600 million won when the existing profit-sharing bonus, or OPI, is included.
\r\nWhat has angered employees at other affiliates most is that even non-memory units such as System LSI and Foundry, which are in the red, would still receive at least 160 million won under the shared fund distribution rule. With OPI included, the payout would exceed 200 million won.
By contrast, the reality at major affiliates such as Samsung Display, Samsung SDI, and Samsung Electro-Mechanics is harsh. The relative sense of deprivation felt by veteran managers who have quietly carried the burden of results, and by new employees just starting out, is laid bare by the numbers. This year’s wage increase rates at Samsung Display (6.2%), Samsung Electro-Mechanics (5.9%), and Samsung SDI (4.0%) all fell short of Samsung Electronics’ overall level.
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The bigger problem is the unfair bonus calculation structure. Unlike Samsung Electronics’ Device Solutions Division, which changed its OPI calculation method from the existing economic value added, or EVA, to a more transparent '10% of operating profit,' affiliates are still tied to the EVA standard, which favors management.
\r\nSamsung Electro-Mechanics posted a profit of more than 600 billion won in 2023, yet its OPI payout rate was only 1% of annual salary, or about 500,000 won for a new employee. Samsung SDI, hit hard by the electric vehicle slowdown, received no OPI at all last year. The distorted compensation structure, in which a loss-making unit can pocket 200 million won while a profitable affiliate gets just 500,000 won, has only deepened the anger of employees who jokingly call themselves the 'later Samsung.'
Given the situation, union activity at the affiliates is also becoming more intense. Samsung Display and Samsung Electro-Mechanics are preparing to gather opinions and pressure management in order to revise the OPI calculation method to one based on operating profit.
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The market’s biggest concern is the 'learning effect' of strikes. Samsung Biologics labor union members have already gone on strike, and Samsung C&T Engineering & Construction Division avoided a strike crisis by sharply raising its wage increase rate from the original 3.0% to 4.3% in order to reach a settlement. Samsung’s long-standing principle of 'reward where there is performance,' grounded in hard data and results, has been undermined. In its place, a new formula seems to be taking hold: aggressive action leads to exceptional compensation. If unions at each affiliate, having seen the benefits of striking, join forces and expand their influence, Samsung Group is likely to face increasingly uncontrollable structural turmoil every year during wage negotiations.
jsi@fnnews.com Jeon Sang-il Reporter