Bonus funding and institutionalization remain unresolved after 17 hours
A labor union rally held at Samsung Electronics’ Pyeongtaek Campus in March 2026.
Samsung Electronics and its union failed to reach an agreement on the source of funds for performance bonuses and their institutionalization after more than 17 hours of marathon negotiations at the National Labor Relations Commission that lasted until the early morning of May 13. Amid the breakdown, Samsung Electronics expressed regret, stating, “The post-mediation adjustment has fallen through due to the union’s declaration of a breakdown.”
In a statement on the same day, Samsung Electronics announced, “The post-mediation adjustment, which the government worked hard to arrange, has unfortunately fallen through due to the union’s declaration of a breakdown.” The company added, “The government supported the talks by presenting various alternatives based on the positions of both labor and management, but the union declared a breakdown early this morning.”
It continued, “This decision by the union is an act that causes great concern and anxiety not only to the company but also to the employees, shareholders, and the public who were awaiting a settlement, and it is deeply regrettable.” The company also said, “The union is rejecting the company’s proposal for a flexible institutionalization based on business performance and has consistently adhered only to a rigid institutionalization.”
Samsung Electronics added, “We will continue our efforts to prevent the worst-case scenario through sincere dialogue until the very end,” and “We thank the government and all related parties for their efforts in the mediation.”
Meanwhile, the Samsung Electronics branch of the supra-enterprise union rebutted, stating, “We requested a mediation proposal as the differences between labor and management could not be narrowed, but the proposal that came out after waiting for nearly 12 hours was actually a step backward.”
According to the union, the mediation proposal included maintaining the current Over-Profit Incentive (OPI) system based on Economic Value Added (EVA) and keeping the 50% cap for both the Device Solutions (DS) and Device eXperience (DX) divisions.
It also included a plan to pay 12% of the operating profit exceeding the OPI as a special management performance bonus for the DS division, but only if the company achieves the number one domestic ranking in sales and operating profit in 2026. The DX division was excluded from this, and the union explained that the payment conditions for the OPI stock compensation plan were not clear.
The supra-enterprise union argued, “The union’s demands are the abolition of the cap, transparency, and institutionalization.” It also stated, “The proposal for the DS division’s special management performance bonus, which applies only when performance is higher than SK Hynix, is also unacceptable as it makes our performance dependent on external factors.” The union further explained, “We declared a breakdown because we could not accept a one-time proposal,” and announced its intention to respond by seeking an injunction against illegal industrial action.
The government also expressed concern about the possibility of a prolonged labor-management conflict. Koo Yoon-cheol, Deputy Prime Minister and Minister of Economy and Finance, stated on X (formerly Twitter) on the same day, “The government finds it very regrettable that the labor-management negotiations at Samsung Electronics failed to reach a settlement even with the government’s post-mediation adjustment.”
Deputy Prime Minister Koo emphasized, “Samsung Electronics is an important company that the world is watching.” He stressed, “Both labor and management must continue to strive to achieve a principled negotiation, comprehensively considering the current business situation and its impact on the national economy.” He added, “A strike must never happen,” and stated, “The government will continue to provide support until the end to ensure the issue is resolved through principled negotiations under any circumstances.”
Jung Suk-yee
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