Samsung created its 'gold spoon' union with 2023 actions

Ahn Hai-ri

The author is an editorial writer at the JoongAng Ilbo

“What was bound to come has finally arrived. And that makes 2023 all the more regrettable.”

That was my reaction to the idea of a “citizen dividend” floated by Kim Yong-beom, presidential chief of staff for policy.

Samsung Electronics' Suwon headquarters in Gyeonggi [YONHAP]

Late Monday night, Kim wrote a Facebook post about the controversy over performance bonuses at Samsung Electronics and SK hynix. It was a long-winded piece built on one hypothetical after another, but its core message was simple: “Structural excess profits should be institutionalized socially, and part of corporate gains should be returned to all citizens under the name of a citizen dividend.”

Put plainly, he was arguing that the profits — or excess profits — of companies that make large and sustained earnings belong to all citizens and should therefore be returned to them. Leaving aside the public resentment and stress triggered by the Samsung Electronics union’s threat to strike, I wonder what people think of this view from a senior official in the Lee Jae Myung administration. I do not agree with it. But I fear it could become reality.

I had anticipated something like this when the Samsung Electronics union came forward last month with the excessive demand that 15 percent of operating profit be paid out entirely as performance bonuses, with no cap. Even as the media criticized it as a “gold-spoon union’s money party” or the “unchecked greed of a closed cartel of interests,” and even as tensions spread into a labor-labor conflict between regular workers in the DS, or semiconductor, division and the DX division, which includes mobile phones and other businesses, the leadership of the cross-company union dominated by DS workers showed no sign of listening. Criticism erupted from both the left and the right.

Emboldened by this mood, the Democratic Party (DP) and the broader progressive camp began pouring out demands that sounded socialist in nature: measures to control export companies so they cannot change rules such as performance bonus systems at will; social distribution; social solidarity funds; union contributions to foundations; and returns to farming and fishing communities. A column by a professor of Korean literature was emblematic. The professor wrote that semiconductor profits “should first go to regular workers, irregular workers and subcontractor workers, and should rightly be returned to society.” After watching this monthlong free-for-all of empty rhetoric, I had been thinking a backlash would come soon. Then came Kim’s remarks.

Instead of joining the whole country in bashing the union, I would like to direct some criticism at Samsung Electronics’ former management, which in effect helped create a union that now makes unreasonable demands with such confidence and refuses to communicate. Wondering how the union came to behave this way, I went through all of Samsung Electronics’ and SK hynix’s business reports from 2016 to 2025. There were quite a few instances in which management responded poorly — more than can be dismissed as merely a failure to share profits or an opaque compensation system. This was especially true in 2023, the year of the worst semiconductor slump.

The most glaring examples were the excessive severance packages set for registered executives and the huge bonuses that had effectively been guaranteed regardless of performance. Samsung Electronics’ DS division posted an operating loss of 14.9 trillion won ($10 billion) that year. SK hynix limited its operating loss to 7.7 trillion won, helped by its relatively strong performance in high bandwidth memory, or HBM. Bonuses fell for employees at both companies, but the decline was steeper at Samsung, causing its average salary to fall below that of SK hynix.

Members of Samsung Electronics labor unions shout slogans calling on the company to scrap a longstanding cap on bonuses during a massive rally inside the company's campus in Pyeongtaek, Gyeonggi, on April 23. [YONHAP]

Yet Kim Ki-nam, who had led Samsung’s DS division since 2018 and was responsible for misjudgments such as halting further HBM development and dismantling the dedicated HBM team, retired in 2023 with 1.68 billion won in salary, 2.45 billion won in bonuses and 12.99 billion won in severance pay. His severance was calculated at 3.6 times the base amount, exceeding Samsung’s executive severance payment rule of 1 to 3.5 times. Over the past decade, dozens of other registered executives who stepped down amid downturns or poor performance also received severance packages close to the maximum — or even above it, ranging from 3.25 to 3.69 times the base amount — without exception. This contrasts with SK hynix executives, who were compensated through stock options after enduring years of losses.

This background likely helps explain why the Samsung Electronics union demanded improvements to what it saw as unfair and opaque performance bonus calculation standards in both 2023 and 2024. But management failed to properly overhaul the system, and the lack of trust between labor and management ultimately led to the current standoff.

If Samsung again settles this dispute with a half-hearted compromise, the result may not be a one-off loss in operating profit from a strike. The company could instead be pushed toward a situation in which corporate management autonomy and market principles themselves are violated. To eliminate any pretext for improper intervention in management, Samsung must respond to the union on principle while redesigning its performance pay system to ensure transparency. Without that legitimacy, it will have no choice but to be dragged around by the union every year.

That is why the missed opportunity of 2023 feels all the more regrettable.

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.