Ha Hyun-ock
The author is an editorial writer at the JoongAng Ilbo.
It is hard to predict how things unfold. Today, amid a semiconductor boom, Samsung Electronics is grappling with internal tensions over large performance bonuses. Yet only three years ago, the outlook was bleak. Its stock price had fallen, and doubts grew over whether it could maintain its technological edge after lagging in high bandwidth memory. Losses even led to zero corporate tax payments, shrinking government revenue. At the time, bonuses were out of the question.
Members of the Samsung Electronics chapter of the Samsung Super-Enterprise union hold a press conference at the main gate of Samsung Electronics’ Seocho headquarters in Seoul on April 17, declaring themselves the majority union and urging the company to begin negotiations. [NEWS1]
The surge in artificial intelligence has changed that picture. Profits are rising, and the pool to be shared has grown. Rival SK hynix has heightened tensions with an announcement of generous bonuses. Labor unions, determined to secure their share, are even prepared to strike. Discussions about priorities such as research and development or capital investment needed to sustain growth are largely absent. Demands for bonuses — estimated at no less than a total of 40 trillion won ($28 billion) — far exceed shareholder dividends of 11.1 trillion won, raising questions about whether a company ultimately serves its shareholders or its employees.
The bonus debate, which began at SK hynix and spread to Samsung and other firms including Hyundai Motor, reflects a common pattern in Korea. Public interest extends beyond employees and shareholders. People with no direct stake comment on bonus policies, while speculation circulates about their potential impact on the real estate market. Some even express concern about the future of companies unrelated to them.
Unions, therefore, find themselves not only negotiating with management but also facing public skepticism. A key question is whether profits achieved during a favorable semiconductor cycle can be attributed to individual performance. This recalls criticism of banks that posted peak profits during a housing boom and distributed large bonuses. Calls have emerged for windfall taxes or for bonuses to be paid in local currency vouchers. In some cases, individuals with no direct ties to the companies have staged one-person protests opposing such payouts.
Unions argue that competitive bonuses are needed to prevent talent outflow and invoke broader social considerations. Samsung’s union has claimed that higher compensation would support science and engineering and ease the concentration of students in medical school. Interest in semiconductor-related academic tracks has indeed increased alongside rising pay in the sector. Even so, using such arguments as a basis for bonuses remains unconvincing.
Another distinctive feature is the influence of egalitarian thinking. Although bonuses are meant to reward performance, uniform distribution has become common, reflecting what some scholars describe as a deeply ingrained cultural tendency. This has led to tensions, as standardized compensation structures encourage free riding and dilute the purpose of performance-based pay.
As bonuses are divided evenly rather than based on role or achievement, rewards for specialized skills, including advanced research, are weakened. This has widened divisions between highly trained researchers and production workers. Increasingly, the decisive factor is not individual capability but whether one belongs to a profitable industry. Critics warn that record bonuses in the chip sector could distort the broader science and engineering ecosystem.
SK hynix headquarter in Icheon, Gyeonggi, on January [YONHAP]
Despite differences across industries, demand for bonuses are spreading. Major corporate unions are using semiconductor-sector payouts as leverage. Hyundai’s union, for example, plans to seek bonuses equivalent to 30 percent of last year’s net profit, drawing on precedents set by SK hynix and Samsung. The situation suggests a form of benchmarking that could raise expectations across sectors.
Sharing corporate gains with employees is not inherently unreasonable, and companies have at times been slow to distribute profits. Yet the widespread attention to bonus policies reflects deeper discomfort. It is not simply a matter of envy or interference. Rather, the unease stems from the perception that bonuses have become detached from measurable performance and resemble windfalls. Had bonuses functioned more clearly as performance-based compensation, such a debate might not have emerged.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
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