DS Division Bonus Pool Set at 10.5% of Results wile DX Employees Face Wider Gap as Shares Replace Cash Rewards
After concluding Samsung Electronics wage negotiations held at the Gyeonggi Regional Employment and Labor Office on may 20, Yeo Myung-gu, head of the People Team for Samsung Electronics’ DS Unit, and Choi Seung-ho, chair of the Samsung Electronics branch of the Samsung Group National Labor Union, sign the tentative agreement and join hands with Minister of Employment and Labor Kim Young-hwan. [Joint press corps]
Samsung Electronics and its labor union have tentatively agreed to a special management performance bonus system that will use a 10% range of the Device Solutions (DS: including Memory, System LSI, Foundry businesses) Unit's business performance as the source of bonus funds. As a result, employees in the Memory Business Division will be able to receive performance bonuses of up to about 600,000,000 won (approximately $400,000) this year.
According to the company and labor union’s “2026 Tentative Labor-Management Agreement on Bonuses” on May 21, the existing OPI (Overall Performance Incentive) system will be maintained, while a new special management performance bonus system will be introduced for the DS Unit.
The source of funds for the special management performance bonus was set at 10.5% of business performance as agreed by labor and management, with no upper limit on payout. The funds will be allocated at a ratio of 40% to the DS Unit and 60% to the Memory Business Division.
If the business performance agreed by labor and management is applied on the basis of operating profit, a total bonus pool of 31.5 trillion won will be prepared this year based on Samsung Electronics’ projected operating profit of about 300 trillion won.
Of that, based on the 40% allocated to all 78,000 employees across the DS Unit, performance bonuses of about 160 million won per person would be distributed regardless of business unit.
When the remaining 60%, which is distributed to the Memory Buiness Division, is reflected, an individual employee in the division would receive an additional about 380 million won, while the worker in the other divisions would receive about 270 million. In the case of the Memory Business Division, calculations show that, including the existing OPI, it would be possible to receive performance bonuses of up to about 600,000,000 won based on an annual salary of 100 million won.
By contrast, non-memory business divisions expected to post losses may be excluded from OPI payments. However, it was agreed that at least a minimum level of special management performance bonus would be paid using division-wide common funds.
The special management performance bonus will be paid entirely after tax in treasury shares. One-third of the shares paid can be sold immediately, while the remainder will be subject to sale restrictions for 1 year and 2 years, respectively.
Labor and management agreed to operate the system for the next 10 years, setting conditions of achieving DS Unit operating profit of 200 trillion won in 2026 through 2028 and 100 trillion won annually in 2029 through 2035.
Along with this, the average wage increase rate for this year was set at 6.2%.
Meanwhile, with the tentative 2026 wage agreement between Samsung Electronics and its labor union made public, the performance bonus gap between the DS Unit and the DX (Device eXperience) Unit, which produces finished-products like smartphones, TV and home appliances, is expected to widen sharply, likely driving to deepen the DX Unit's sense of relative deprivation. That is because the Memory Business Unit is expected to receive bonuses worth several hundred million won, while the DX Unit is expected to remain at existing levels.
As indicated above, Samsung Electronics and its labor union prepared a tentative agreement under which the bonus system would be split into the existing performance incentive (OPI) and a DS Unit special management performance bonus.
OPI will be capped at up to 50% of annual salary as before, and paid to all employees in both the DS and DX Units. By contrast, the special management performance bonus will be paid separately only to the DS Unit, which is in charge of the semiconductor business. The special management performance bonus will be funded with 10.5% of DS operating profit and will have no payout ceiling.
In particular, in the case of the Memory Business Division, which led performance, performance bonuses of about 600 million won before tax based on an annual salary of 100 million are being discussed as possible. Of that, about 550 million won is expected to consist of the special management performance bonus.
Meanwhile, the maximum OPI payout is limited to about 50 million won, as the 50% cap on annual salary for OPI remains in place.
Even non-memory business divisions such as System LSI and Foundry, which are recording losses, are expected to receive substantial bonuses under the common allocation structure for the DS Unit as a whole. Because a method is applied in which 40% of the special management performance bonus pool is jointly distributed across the DS Unit, the non-memory segment is also expected to secure special bonuses of about 160 million won.
With the same OPI paid across the entire DS Unit, there is also the possibility that employees in non-memory business divisions in the DS Unit could receive total performance bonuses exceeding 200 million won.
The DX Unit, however, was excluded from the special management performance bonus. Employees in the DX Unit will only be able to receive the existing OPI, so based on an annual salary of 100 million won, they are expected to remain at a maximum of about 50 million won.
The DX Division is known to have posted operating profit of about 3 trillion won in the first quarter of this year, but there appears likely to be internal dissatisfaction given that its bonus scale could be far lower than that of some business divisions within DS Unit that are posting annual losses.
In particular, there are reactions that the company’s decision to grant DX Unit employees treasury shares worth 6 million won as part of mutual prosperity and cooperation is instead heightening their sense of deprivation.
Amid this atmosphere, moves by DX Unit employees to leave the union are also continuing. Membership in the Samsung Electronics branch of the Samsung Group National Labor Union, the largest union at Samsung Electronics, once approached 77,000, but has recently reportedly fallen to around 70,000.
Some DX Unit members have also raised issues over the representative nature and procedural legitimacy of the industrial union and have filed an application with the court for an injunction to suspend collective bargaining.
Jung Suk-yee
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