"Annual January Feeling of Deprivation"... Mixed Emotions Among Workers Over Lunar New Year Bonus

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[Asia Economy Reporter Kwon Seo-young] As various companies are reported to have paid performance bonuses, concerns are also rising over the deepening sense of relative deprivation caused by the so-called 'performance bonus polarization.'

According to the business community on the 30th, Samsung Electronics and SK Hynix paid large-scale performance bonuses amid the global boom in the semiconductor market. Samsung Electronics, which ranked first in memory semiconductor market sales last year, decided to pay a special performance bonus equivalent to 300% of the base salary (bonus base pay) to employees of the Memory Division, and additionally paid 200% incentives to support department employees such as the head of the semiconductor package TSP and the head of global infrastructure.

Samsung currently operates regular performance bonus systems including the Target Achievement Incentive (TAI, formerly PI) and the Over-Profit Incentive (OPI, formerly PS). The TAI was decided at up to 100% of the base salary at the end of last year, and the OPI is the performance bonus paid ahead of this Lunar New Year. Accordingly, the Memory Division, Foundry Division, and System LSI Division were set at the highest level, receiving 50% of their annual salary, while the MX Division responsible for smartphones and the Visual Display Division also received 50% of their annual salary.

SK Hynix, which recorded its highest-ever annual sales last year, paid a performance bonus equivalent to 1000% of the base salary (50% of annual salary) for last year. This was decided at the maximum annual performance bonus limit of 1000% after labor and management agreed to allocate 10% of annual operating profit as the performance bonus fund. Any funds exceeding this will be subject to board consultation procedures to determine the timing and scale of future payments.

LG Chem also paid performance bonuses to employees after recording its best-ever performance last year. Employees in the petrochemical division, which posted strong results, received an average of 850% of their base salary as performance bonuses, while employees in the advanced materials and life sciences divisions received an average of 600%. This is double the amount of performance bonuses they received last year.

Customers are consulting at the Shinhan Financial Investment branch in Yeouido, Seoul, on the 19th, the closing day for the public offering subscription for general investors of LG Energy Solution.
[Photo by Yonhap News]

However, among LG Chem employees, there were claims that the performance bonuses were insufficient. They pointed out that the bonuses were inadequate to compensate for the psychological deprivation felt during the LG Energy Solution IPO process. Previously, LG Chem's petrochemical division had supported LG Energy Solution by providing investment funds when LG Energy Solution, then LG Chem's battery division, was operating at a loss, but later complained of unfairness after being excluded from the employee stock ownership plan allocation of LG Energy Solution.

In addition, voices from the small and medium-sized enterprise (SME) sector continue to express difficulties in paying Lunar New Year bonuses. With the prolonged COVID-19 pandemic showing no signs of easing business difficulties, it remains challenging to provide bonuses to employees. According to the '2022 SME Lunar New Year Fund Demand Survey' recently released by the Korea Federation of SMEs, 26.0% of respondents said "financial conditions are difficult."

In particular, 85.6% of respondents said COVID-19 had an impact on worsening financial conditions, but only 37.6% of SMEs responded that they would pay Lunar New Year bonuses (in cash). The average amount of this year's Lunar New Year bonus was also 447,000 KRW, a decrease of 35,000 KRW compared to last year's average of 482,000 KRW.

Furthermore, office workers have expressed that they feel a stronger sense of relative deprivation as they learn about other companies' performance bonus payments through online communities or internal bulletin boards. On one online community, a post stating, "(Within affiliates of the same group) the performance bonuses differ too much," and "Every year at the end of January, I feel emptiness, loss, deprivation, and alienation," resonated with many readers.

This content was produced with the assistance of AI translation services.