Samsung Memory Staff to Get About $543,000 Each in Incentives After Next Year’s Shareholder Meeting

Samsung Labor Union Reveals Details of Special Incentive Plan

About $384,000 for Shared Units, About $174,000 for LSI and Others

Samsung Electronics’ Device Solutions division, which houses its chip business, will pay its special management incentive, known as OPI2, between late March and early April next year. Employees in the memory business earning just over $58,000 a year are set to receive about $543,000 in pretax incentives.

The Samsung Electronics chapter of the Samsung Group Employees’ Solidarity Union disclosed the details of the DS division’s special management incentive plan on October 7. The pool will be funded with 10.5% of the division’s operating profit this year. After deductions for taxes of 49.5%, including local taxes, as well as insurance premiums and donations, the payout will be made in Samsung Electronics shares.

Eligible recipients are employees still with the company as of December 31 this year, as well as those on childcare, pregnancy, military service or caregiving leave of 90 days or less, provided the DS division accounted for the largest share of their working hours this year. Dispatched employees and regional specialists will receive 50% of the calculated amount. One-third of the shares can be sold immediately. The remainder will be subject to lockups of one year and two years, respectively.

Detailed payout ratios for each business division will be announced in February next year. Payment was set for late March to early April, after Samsung Electronics’ regular shareholder meeting in March and a board resolution. The plan does not include an alternative payment method if shareholders fail to approve the treasury-share payout proposal. The existing management performance incentive, or OPI, will be paid at the end of January next year as usual.

The union also presented estimated payouts by division. The figures assume Samsung Electronics reaches this year’s operating profit consensus of $26.8 billion and estimate pretax payouts, including OPI, for employees earning just over $58,000 annually. Memory division employees would receive about $543,000, shared organizations about $384,000, and the loss-making System LSI and foundry divisions about $174,000. Actual payouts may vary depending on Samsung Electronics’ earnings and each division’s performance.

The company and labor union will also pursue a joint donation program linked to the incentive payments. If employees voluntarily donate 0.2% to 1% of the special incentive, management and labor will each contribute a matching amount on a one-to-one basis. The specific recipients of the donations will be decided later.

Kim Chae-yeon, Hankyung.com reporter why29@hankyung.com