If They Fail Next Year, Bonus Drops to 97 Million Won... A Closer Look at Samsung Electronics DS Division’s 600M vs 460M vs 160M Performance Bonuses

Three Accounts Under One Roof at Samsung Electronics DS Division
Memory Business Division Emerges as Biggest Winner, Nearly 600 Million Won Bonus Jackpot
Shared Organization Also Projected to Receive Over 460 Million Won
Non-Memory Units Expect 160 Million Won; Tasked With Returning to Profitability

As Samsung Electronics' labor and management reached a groundbreaking agreement to fix the performance bonus standard for the Device Solutions (DS) semiconductor division at 10.5% of business performance, attention is now focused on the actual bonus amounts per business unit. In particular, with this agreement, the upper limit on payout rates has been completely abolished, making unlimited performance-based rewards possible. If Samsung Electronics’ operating profit this year reaches 300 trillion won, as many in the market expect, and the average annual salary per employee is assumed to be 100 million won, the performance bonuses for each business unit within the DS division are expected to vary by several hundred million won.

According to industry sources on May 21, employees in the Memory Business Division, considered the biggest beneficiaries of this restructuring, are expected to receive a "jackpot" of nearly 600 million won.

If the labor-management agreed performance standard is applied to this year’s forecasted operating profit of Samsung Electronics, which is around 300 trillion won, a total pool of 31.5 trillion won will be generated solely for the special management performance bonus for semiconductors. In this scenario, approximately 78,000 employees in the entire DS division will first receive a division-wide share (40% of the total pool, about 12.6 trillion won), guaranteeing each employee about 162 million won regardless of whether their business unit posts a profit or loss.

On the 20th, at the Gyeonggi Employment and Labor Office in Jangan-gu, Suwon, Gyeonggi Province, Yeomyeonggu, Head of the People Team at Samsung Electronics DS (Device Solutions - Semiconductor Business), and Choi Seungho, Chairman of the Samsung Electronics Branch of the Samsung Group Supra-Enterprise Labor Union, signed the tentative agreement after concluding Samsung Electronics' wage negotiations. They then took a commemorative photo with Kim Younghoon, Minister of Employment and Labor. Photo by Yonhap News Agency

The remaining 60%, or 18.9 trillion won, will be distributed between the profitable business units and the shared organizations, creating disparities. This year’s special management performance bonus will be allocated on a differentiated basis to approximately 28,000 Memory Business Division employees and about 30,000 personnel in the division’s shared organization at a ratio of 1 to 0.7. According to this formula, the Memory Business Division will receive an additional 386 million won per person, while the shared organization will receive an additional 270 million won per person as their respective business unit shares.

For the Memory Business Division, the existing Over-Performance Incentive (OPI), which is capped at 50% of annual salary, or about 50 million won, will also be fully paid due to the super-boom. As a result, the total amount received, combining the special performance bonus and OPI, is estimated to reach about 598 million won per person.

The shared organization, which supports the semiconductor division through departments such as HR and finance, will also receive unprecedented rewards that surpass most field business units. In addition to the basic shared allocation of 162 million won, the shared organization will receive an additional business unit share of about 270 million won, in accordance with the agreement clause that stipulates "apply 70% of the Memory Business Division payout rate." Taking into account the existing OPI-linked portion, the final amount received is expected to be around 467 million won per person. Despite being a support department, the shared organization is thus enjoying performance rewards on par with the Memory Business Division.

For non-memory business units such as Foundry (semiconductor contract manufacturing) and System LSI, the DS division’s shared resources have been a relief this year. However, starting next year, they will face a strict "conditional penalty." This is because the agreement includes a clause that limits business units in the red to receiving only 60% of the division’s common payout rate. This year, just like the Memory Business Division, they are guaranteed a performance bonus of 162 million won. But starting from 2027, when the clause takes effect, if they fail to escape deficits, even the common allocation will be cut to about 97 million won, which is 60% of the previous amount.

An industry official commented, "The principle that bonuses should be given where performance is generated has been at least partially reflected in this system," adding, "For non-memory business units, the challenge now is to return to profitability next year."

Meanwhile, the special management performance bonus will be paid in company stock, not entirely as post-tax cash. Only one-third can be immediately disposed of after payment, while the remaining two-thirds are subject to sale restrictions for one year and two years, respectively. Furthermore, in order for this system to operate normally, the DS division must post annual operating profits of more than 200 trillion won each year from this year through 2028. For employees at grade CL4 and above, the payout rate will be further adjusted based on individual performance evaluations, according to a differentiated system.

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