"With a Deficit of 13 Trillion Won... Samsung Electronics Semiconductor, Zero Performance Bonus"

Notice of Expected Payment Rates for Excess Profit Bonuses
DS Division 0%
Mobile 46-50%, TV 39-43%

Samsung Electronics' Semiconductor (DS) division employees' performance bonuses have been set at a record low of 0%. This is interpreted as a result of the semiconductor division expecting a deficit of around 13 trillion won this year, making it difficult to pay performance bonuses.

According to industry sources on the 28th, Samsung Electronics announced the expected payout rates for the divisional Over-Profit Incentive (OPI) within the company on the same day.

Samsung Electronics, Seocho-gu, Seoul.
Photo by Yonhap News

Samsung Electronics employees receive performance bonuses three times a year in total. These include the OPI paid at the beginning of the year and the Target Achievement Incentives (TAI) paid once each in the first and second halves of the year. Among these, the OPI is a performance bonus that can be paid up to 50% of an individual's annual salary within a 20% limit of the division's annual excess profit, depending on the business unit's yearly management performance.

Until now, the DS division received the maximum OPI rate of 50% consecutively for last year (2021) and early this year (2022). However, this year, due to a slowdown in semiconductor demand and a sharp price drop, the division recorded losses, causing the performance bonus payout rate to plummet. Samsung Electronics' DS division posted losses of 4.58 trillion won in Q1, 4.36 trillion won in Q2, and 3.75 trillion won in Q3. The cumulative loss through Q3 reached 12.69 trillion won. With an expected loss of about 770 billion won in Q4, the total loss for the year is projected to exceed 13 trillion won. This marks the largest annual operating loss since the company's founding.

This trend was already detected in the TAI announced earlier on the 20th. The DS division received the maximum 100% in the first half of last year but dropped to 50% in the second half of last year and 25% in the first half of this year due to the semiconductor downturn, and now it has been halved again. The current TAI payout rate for the DS division is 12.5%, with variations by business unit: Foundry and System LSI divisions at 0%, Memory division at 12.5%, Semiconductor Research Institute at 25%, and SAIT (formerly Samsung Advanced Institute of Technology) at 25%, showing mixed results.

Meanwhile, in the Device Experience (DX) division, the Mobile Experience (MX) business unit, which achieved better-than-expected results due to strong smartphone sales, is expected to receive an OPI of around 46?50%. The Visual Display (VD) business unit, responsible for TVs, is reported to receive about 39?43%. The Home Appliances (DA) and Network business units, which had poor performance, are said to have payout rates of about 10?12% each.

Additionally, Samsung Display, which posted strong results, recorded an expected OPI payout rate of about 46?49%.

Samsung Electronics plans to announce the exact OPI payout rates at the time of payment in January next year.

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