[News Today] Samsung reaches last-minute labor deal

[LEAD]

Samsung Electronics labor and management reached a tentative deal on bonuses late last night.

The agreement came after a tense final round of talks, just about an hour before a planned general strike.

[REPORT]

Samsung Electronics' labor and management have reached a tentative wage and bonus-pay agreement.

The deal promises to pay bonuses funded by 12 percent of business performance in the semiconductor sector.

The two sides will later decide on the baseline business performance through follow-up talks and agreement.

Combined with a 1.5 percent base incentive under the existing overall performance incentive system, a 10.5 percent special management performance bonus will be paid in company stocks with a strict lock-up period.

The bonuses will be handed out over the next ten years with the sale of stocks limited.

There are also attached conditions: from this year to 2028, the special bonus will be paid only when the company earns KRW 200 trillion in operating profit, and afterwards, when the tech giant's operating profit tops KRW 100 trillion.

Yeo Myeong-gu / Vice president, Samsung Electronics DS Division

Where there’s performance, there should be compensation. We’ve moved to formalize a special rewards system.

For underperforming divisions posting a deficit, a sticking point until the final stage of negotiations, bonuses will be partially reduced. But the new bonus rule will apply starting from next year’s performance cycle.

Choi Seung-ho / Chair, Samsung Electronics Labor Union

As the company suspends the distribution method for underperforming sectors for a year, we agreed to compromise.

The negotiation process was anything but smooth sailing.

After the second post-mediation failed on Wednesday morning, the labor union was moving to stage the strike.

In an unusual move, the employment and labor minister intervened personally to mediate the dispute.

Kim Young-hoon / Minister of Employment and Labor

When I sounded them out, both sides were willing to continue dialogue. Nothing is impossible with wisdom.

About six hours after the minister began acting as an intermediary, Samsung's labor and management reached an agreement and shook on it.

Postponing its plan to begin a general strike on Thursday, the labor union will hold a six-day vote on the tentative deal from Friday.