"45 Trillion Won Bonus Is Self-Destructive; Strong Legal Action" Samsung Electronics Shareholder Group Issues Stern Warning to Union Over Strike

National Appeal from the Shareholders Movement Headquarters of Korea

Warning of “Damage Claims Against Union in Case of Strike”

The Samsung Electronics shareholders' group has warned that if the labor union proceeds with an illegal strike and damages the company's core assets, it will take strong legal action against all union members involved.

According to industry sources on May 6, the Korea Shareholders Movement Headquarters stated in its "Public Appeal Regarding the Samsung Electronics Strike Crisis" that "the union's unreasonable demands are a fatal act of self-harm that simultaneously damages the company's future investment resources and shareholder value."

On the 23rd, union members are holding pickets and shouting slogans at the Samsung Electronics Union Joint Struggle Headquarters rally held in front of the Samsung Electronics Pyeongtaek Campus in Pyeongtaek, Gyeonggi Province. Samsung Electronics Union Joint Struggle Headquarters

The Korea Shareholders Movement Headquarters announced that if a strike is carried out illegally and results in damage to the company's core assets, it plans to file claims for damages against all union members who participated, based on the legal principle of 'third-party rights infringement.' Furthermore, even if management agrees to the union's unreasonable demands regardless of the strike,this will also be regarded as an act infringing upon shareholders' rights to dividends, and a 'derivative lawsuit' will be pursued.

Currently, the Samsung Electronics Labor Union Joint Struggle Headquarters is demanding that 15% of the company's annual operating profit be allocated for performance bonuses. The union has warned that if negotiations do not progress, it will launch a general strike lasting 18 days from May 21 to June 7. Some observers predict that if the strike goes ahead, losses could amount to as much as 20 trillion to 30 trillion won. Securities industry estimates put Samsung Electronics' operating profit for this year at around 300 trillion won, meaning the union's requested bonus amount approaches about 45 trillion won.

In response, the Korea Shareholders Movement Headquarters criticized, "This is more than four times the total shareholder dividend payout executed by Samsung Electronics last year, which was about 11.1 trillion won," adding, "The fact that approximately 70,000 employees are seeking a one-time payout worth four times what over 4 million shareholders receive in a year is an extraordinary phenomenon that surpasses the value of Korea's leading conglomerates."

The Korea Shareholders Movement Headquarters argues that the calculation of bonuses should adopt global standards such as Economic Value Added (EVA), instead of using operating profit as the basis. They explain that taking profits in advance without considering taxes, interest, and shareholder dividends is contrary to accounting principles.

Min Kyungkwon, head of the Korea Shareholders Movement Headquarters, stated, "Calculating performance bonuses based on operating profit means encroaching on creditor interest, taxes, shareholder dividends, and even next year's R&D investment." He emphasized, "Among global semiconductor companies, SK hynix is the only competitor to offer bonuses at a fixed rate based on operating profit. If SK hynix is using an incorrect calculation method, it should be corrected rather than followed."

A banner opposing the total strike of the Samsung Electronics labor union is being installed in front of the National Assembly. Republic of Korea Shareholders Movement Headquarters

Min also addressed concerns about talent outflow raised by the union. He explained, "Most global companies, including TSMC, do not provide uniform cash bonuses, but instead pay compensation such as stock options according to job function." He pointed out, "In fact, the union's method of calculating bonuses, which eats into R&D resources, actually encourages the outflow of talent in the research and development sector, which is where we most need to retain them."

Meanwhile, Choi Seungho, chairman of the Super-Enterprise Samsung Union, responded to the argument that bonuses should be calculated based on EVA. He said, "EVA itself is somewhat opaque, and many employees have left the company out of disappointment with this approach," adding, "Samsung Electronics' turnover rate is 10%, which is not a normal figure, while SK hynix is less than 0.5%." Chairman Choi further stated, "Just like the shareholders' groups, our union members are also shareholders who want the best for the company. If this negotiation concludes successfully, we plan to actively voice our opinions on expanding shareholder returns."

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