Chip bonus plan fuels backlash as payouts for memory staff could be as much as 100 times those for smartphone and home appliance workers
Unionized employees at Samsung Electronics are set to begin voting Friday on a pivotal wage agreement. This proposed deal includes a new chip performance bonus scheme and an average 6.2 percent pay raise, amidst growing discontent among staff outside the company’s crucial memory business due to a widening bonus gap.
The electronic ballot is scheduled from 2 p.m. Friday until 10 a.m. on May 27. Only union members registered by 2 p.m. Thursday are eligible to cast their votes.
For the agreement to become binding, more than half of the eligible members must participate, and a majority of those voting must approve it. Should the proposal be rejected, Samsung and its unions will be required to resume negotiations.
Samsung and its various unions successfully reached this proposed agreement on Wednesday, following months of extensive discussions. The comprehensive package features a special management performance bonus designated for the Device Solutions (DS) division, Samsung’s semiconductor business, funded by a pool equivalent to 10.5 percent of the division’s operating profit.
Additionally, the agreement introduces a new housing loan program offering up to 500 million won ($330,300). The overall 6.2 percent average wage increase comprises a 4.1 percent base raise and a 2.1 percent performance-based adjustment.
Industry analysts and brokerage houses anticipate Samsung Electronics will report an operating profit of approximately 300 trillion won this year. Based on this projection, a substantial 31.5 trillion won would be allocated to fund the new chip bonus scheme.
Employees within Samsung’s high-performing memory division, which has been instrumental in the company’s recent earnings recovery, could potentially receive total bonuses nearing 600 million won this year. This figure combines the new special bonus with the company’s existing overall performance incentive (OPI).
Meanwhile, non-memory employees across Samsung’s System LSI and foundry units are also projected to receive performance bonuses of around 210 million won. This includes both the special chip bonus and the existing OPI, despite these businesses facing anticipated losses. This allocation reflects a DS-wide formula that dedicates 40 percent of the semiconductor division’s bonus pool for broader distribution across the entire chip business.
In stark contrast, employees in the Device eXperience (DX) division, responsible for Samsung’s popular smartphones, home appliances, and televisions, may only receive performance bonuses worth approximately 6 million won in company shares. They are also widely expected to miss out on the existing OPI due to less favorable earnings prospects for their division.
This significant disparity, which could represent a tenfold gap between divisions, has understandably sparked considerable frustration among DX employees and even some non-memory chip workers.
The mounting discontent has consequently triggered a late surge in union membership. The Samsung Electronics Donghaeng Labor Union, predominantly comprising DX employees, witnessed its membership soar from roughly 2,600 to over 12,000 as of Thursday afternoon. This rapid growth occurred as some workers actively encouraged colleagues to secure voting rights and formally oppose the proposed wage agreement.
However, this sudden increase in membership has been complicated by an ongoing dispute regarding the voting eligibility of Donghaeng members.
Choi Seung-ho, head of the Samsung Electronics Labor Union—which has represented workers in wage negotiations as part of a joint bargaining group with two other unions—informed Donghaeng that it was understood to have forfeited its voting rights upon withdrawing from the group.
The provisional agreement was formally signed between Samsung management and the joint bargaining group, establishing Donghaeng’s withdrawal as the core reason for the current voting rights contention.
Donghaeng had previously joined the Samsung Electronics Labor Union within a joint struggle committee formed for wage talks. However, it later pulled out, stating that the perspectives and concerns of DX employees were not being adequately represented or reflected.
In a public notice posted on its website, Donghaeng asserted that the largest union had distributed shared emails on Wednesday and Thursday. These emails, according to Donghaeng, requested each union to conduct a vote on the tentative agreement and to synchronize their membership lists as of 2 p.m. on Thursday. Furthermore, Donghaeng highlighted that the emails also explicitly stated the voting rights of all unions would be respected.
“Our union has finalized all necessary preparations to ensure the voices of DX division members are heard,” Donghaeng declared. “The Samsung Electronics Labor Union is once again jeopardizing the opportunity for the DX division’s voice to be heard, attempting to silence it through a unilateral notice.”
This statement strongly indicates Donghaeng’s intention to proceed with its internal vote, even though the joint committee might ultimately opt not to include its results in the final tally for the broader agreement.
As of Friday, Samsung’s three primary unions reported a combined membership of 101,075, a figure that includes overlapping memberships: 70,850 at the Samsung Electronics Labor Union, 19,053 at the National Samsung Electronics Union, and 11,172 at Donghaeng.
Consequently, even if approximately 10,000 Donghaeng members vote against the agreement, the proposal could still pass if members of the two larger unions—predominantly composed of semiconductor employees—cast their votes largely in favor.
The Suwon branch leadership of the National Samsung Electronics Union, alongside Donghaeng, had scheduled a press conference for 11:50 a.m. Friday. This event, planned in front of Samsung Electronics’ Suwon campus in Gyeonggi Province, aimed to articulate the DX division’s official position on the tentative agreement.
Choi, addressing union members, emphasized that the agreement truly reflected the collective efforts of the union and its joint struggle committee.
“This agreement is the culmination of the strenuous efforts that the union and the joint struggle headquarters put forth with all their strength,” Choi stated. “We will interpret the outcome of the vote on this tentative agreement as the direct scorecard provided to us by our esteemed members.”
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