Samsung averts strike with deal offering an average $338,000 bonus
What's the story
Samsung Electronics has averted a planned 18-day strike by reaching a tentative agreement with labor unions. The deal, reached after government-mediated talks, will see semiconductor employees receive average bonuses of about 509 million won ($338,000). The agreement comes as Samsung's chip business thrives on the back of surging demand for artificial intelligence (AI) technologies.
Bonus details
Bonus pool linked to chip division's operating profit
The provisional deal includes a new bonus pool for semiconductor employees, linked to the division's operating profit. Under the proposal, workers would get bonuses equal to 10.5% of the chip division's operating profit, paid in stock, plus an additional 1.5% in cash. This could theoretically allow employees to receive bonuses up to 12% of operating profit.
Scheme conditions
Proposed bonus scheme hinges on chip division's operating profit
The proposed bonus scheme is for a decade and hinges on the chip division meeting certain operating profit criteria. These include an annual operating profit of 200 trillion won or more between 2026 and 2028, and an annual operating profit of 100 trillion won or more until 2035. The deal comes as Samsung's semiconductor business benefits from increased demand linked to artificial intelligence technologies.
Shareholder dissent
Opposition from shareholders
Despite the provisional labor agreement, opposition from certain shareholders persists. One such group, the Korea Shareholders Action Headquarters, has vowed to take legal action. They argue that the profit-sharing bonus plan falls within the purview of Commercial Law and requires shareholder consent. The group staged a protest near Samsung Electronics Chairman Lee Jae-yong's residence and said it would "use all legal means available" to block any disbursement of company funds based on the agreement if finalized without following required procedures.