Samsung Electronics Labor and Management Resume Bonus Negotiations

Samsung Electronics' labor and management are set to resume bonus negotiations after accepting the government's recommendation for post-mediation.

On the 8th, the Samsung Electronics Trans-Enterprise Union announced that negotiations would proceed through 'post-mediation,' a process where the Labor Relations Commission mediates dispute resolution with the consent of both parties after the termination of labor dispute adjustment procedures. This mediation process is scheduled to take place over two days, the 11th and 12th.

The core issue of the negotiations is the Trans-Enterprise Union's demand to allocate 15% of operating profit for bonuses in the semiconductor division (DS) and abolish the bonus cap. If 15% of operating profit is used as the bonus fund as the union demands, concerns are being raised about a potential 'bonus inflation' spreading throughout the industry. This could also lead to a weakening of investment competitiveness.

The Samsung Electronics union is demanding 15% based on the precedent set by SK Hynix, which uses 10% of operating profit as its bonus fund. In SK Hynix's 2021 labor-management negotiations, an agreement was reached to utilize 10% of operating profit for bonuses, and last year, SK Hynix abolished its bonus cap, previously set at 1000% of base salary, and agreed to maintain this arrangement for 10 years.

According to securities firm estimates, Samsung Electronics' operating profit for this year is projected to reach 300 trillion won. Under the union's demands, the total bonus pool would be estimated at 45 trillion won. JP Morgan has analyzed that if Samsung Electronics pays bonuses according to the union's demands, the additional labor cost burden could range from 21 trillion to 39 trillion won, carrying a risk of a 7-12% drop in projected operating profit by 2026.