Samsung Chip Bonus Deal Spurs Anger at Affiliates After 200 Million-Won Payouts Despite Losses

Sense of deprivation grows across affiliates, fueling calls for bigger bonuses

Profit-linked bonus deal sets a precedent

Display and electronics units discuss overhauling pay systems

Belief spreads that strikes can force change

Turnout reaches 88% four days after tentative deal

DX union seeks injunction to halt ratification vote

The fallout from Samsung Electronics Co.’s unusually generous bonus agreement is spreading across the group’s affiliates. As the company’s compensation plan for even loss-making business units has come into focus, employees at major affiliates including Samsung Display Co., Samsung SDI Co. and Samsung Electro-Mechanics Co. are stepping up demands to overhaul their bonus systems.

◇ Unions at other affiliates press for system changes

Those affiliates concluded 2026 wage negotiations earlier this year. But discontent has intensified since Samsung Electronics disclosed its bonus payout plan. Employees at those units, who have long referred to themselves as “Samsung huja,” meaning those who come after Samsung Electronics, are increasingly voicing anger over what they see as inferior treatment. This year’s wage increase rates were set at 6.2% for Samsung Display, 4.0% for Samsung SDI and 5.9% for Samsung Electro-Mechanics, generally below Samsung Electronics’ 6.2%.

The formula used to calculate OPI, Samsung’s performance bonus, has also become a flashpoint. Samsung Electronics’ Device Solutions, or DS, division agreed to change the OPI formula to 10% of operating profit from the previous economic value added, or EVA, basis. Affiliates still adhere to the EVA standard. Pushback is strongest at units that posted profits in the past but received only small bonuses. Samsung Electro-Mechanics posted more than 600 billion won ($434 million) in operating profit in 2023, but its OPI payout amounted to just 1% of annual salary. The payout rate remained in single digits at 5% to 6% in 2024 and 2025.

This year, the picture is different. Samsung Electro-Mechanics is forecast to post operating profit of about 1.5 trillion won ($1.09 billion), buoyed by a semiconductor supercycle. That stands to intensify demands for higher bonuses. At Samsung SDI, which recorded zero OPI last year after taking a direct hit from a temporary slowdown in electric-vehicle demand, more employees are also expressing frustration as Samsung Electronics rewards even loss-making divisions.

Labor and management at several affiliates are now moving into more serious discussions on revamping bonus systems. Samsung Display’s union plans to formally discuss introducing an alternative compensation program to replace bonuses with management in the second half of this year. Samsung Electro-Mechanics’ union also plans to gather employee opinions on changing the OPI formula.

“Samsung Electronics has put forward an unprecedented compensation package, and the sense of relative deprivation among affiliate employees has reached an extreme,” an industry official said. Affiliate management will have difficulty ignoring calls to revamp bonus systems if they want to prevent key talent from leaving and stabilize their organizations, the person added.

◇ Ratification vote appears likely to pass

Samsung Electronics’ tentative wage and collective bargaining agreement for this year is seen as having a strong chance of passing. According to the Samsung Electronics chapter of a Samsung Group-wide industrial union, turnout had reached 87.93% as of 5 p.m. on May 25. Participation could approach 90% by the May 27 deadline.

Driving the high turnout is a special management-performance bonus to be paid in treasury shares, funded with 10.5% of business performance. DS division members, who are the main beneficiaries, account for 80% of all union members. Employees in the memory business, numbering about 24,000, are estimated to receive 600 million won ($434,000) in bonuses based on an annual salary of 100 million won.

Still, the stark compensation gap is causing significant friction. The expected special management-performance bonus for the Device eXperience, or DX, division, which includes consumer electronics and mobile, is only about 6 million won ($4,340). Even within DS, bonuses for the System LSI and foundry businesses, which remain loss-making, are estimated at around 160 million won ($116,000), about one-quarter the level for memory staff. Donghaeng Union, one of the three major unions centered on the DX division, plans to file a court injunction on May 26 seeking to halt the ratification vote on the tentative agreement. The union argues that the industrial union excluded it from the bargaining process because it feared DX employees would vote as a bloc.

The agreement is also raising concerns that polarization in South Korea’s labor market could deepen. Leaders Index said the average annual salary at large companies last year was 102.8 million won ($74,500). The Korea Enterprises Federation, the country’s main employer lobby, put the average wage per regular employee across all domestic businesses at 50.61 million won ($36,700). On that basis, some Samsung Electronics employees whose total compensation could reach 700 million won ($507,000), including bonuses based on a 100 million won salary, would earn about 14 times the average worker.

Kim Chae-yeon / Kwak Yong-hee, Hankyung.com reporters why29@hankyung.com