Samsung Bonus Surprise... Japanese Media Says "Japan Should Learn from Korea"

Samsung Electronics Headquarters in Seocho-gu, Seoul [Image source=Yonhap News]

[Asia Economy Reporter Hwang Sumi] Japanese media have published reports focusing on the management performance and employee compensation of Korean semiconductor companies such as Samsung Electronics.

On the 9th, Nihon Keizai Shimbun (Nikkei) reported, "Samsung Electronics pays an excess profit performance bonus of up to 50% of the annual salary (equivalent to 6 months' pay) if the business unit's management performance exceeds the target each year."

It also introduced that last December, Samsung Electronics distributed a special incentive equivalent to two months' salary to all employees, followed by an additional bonus equivalent to three months' salary at the end of January this year.

The media explained, "This special bonus was paid separately from the regular performance-linked bonuses because Samsung Electronics ranked first in global semiconductor sales last year, surpassing Intel."

It then cited the business report submitted by Samsung Electronics to the Korea Exchange, stating that the average annual salary of 109,490 Samsung employees in Korea was 127 million KRW in 2020, a 26% increase compared to five years ago. It was expected that their average salary increased even more in 2021.

The performance system of SK Hynix was also analyzed as being on par with Samsung. The media highlighted that SK Hynix paid a special bonus equivalent to 10 months' salary to all employees at the end of January as a performance bonus for last year's results.

It added an interpretation that the solid employee compensation systems of Samsung Electronics and SK Hynix stem from the chronic shortage of engineers. The semiconductor sector is experiencing continuous global demand growth, leading to fierce competition for talent recruitment through advanced development and factory expansions. Especially in the scouting war against Chinese companies offering astronomical salaries, companies have no choice but to focus on improving treatment to retain talent.

Furthermore, the media criticized the Japanese government for failing to establish a long-term strategy despite pledging to revive the semiconductor industry. It pointed out the need to properly understand the reality that the number of people willing to conduct semiconductor research at universities and companies in Japan is decreasing after more than ten years of major electronics companies abandoning or downsizing their semiconductor businesses.

Japan's rigid wage system was also cited as a problem. The report emphasized, "To revive the semiconductor industry, there is much to learn from Korea's example on how to secure and nurture engineers, the source of competitiveness."

SK Hynix Headquarters in Icheon, Gyeonggi-do [Image source=Yonhap News]

Meanwhile, amid intensifying global competition in key industries such as semiconductors, domestic companies are introducing systems to extend or abolish retirement age to secure excellent technical talent.

The purpose is to retain experienced veteran engineers who have accumulated long-term experience while instilling a future vision in young talents that they can work without worrying about retirement age.

According to the business community on the 13th, Samsung Electronics plans to implement a 'Senior Track' system from this year, allowing outstanding personnel to continue working after retirement age. Specific implementation guidelines regarding eligibility, extension period, and treatment are currently being prepared.

Park Jung-ho, Vice Chairman of SK Hynix, attracted attention from the business community by declaring in his New Year's address last month, "We will create a company with no retirement age for excellent technical talent."

SK Hynix introduced the Honored Engineer (HE) system in December 2018, allowing outstanding technical experts to continue working beyond the retirement age of 60, and produced its first expert in 2020.

LG Electronics operates its system flexibly by assigning advisory roles through consulting contracts even after retirement age for outstanding talents, including those with specialized technical skills.

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