People enter Samsung Electronics headquarters in Suwon, Gyeonggi Province, Friday, the same day its labor unions began voting on a tentative wage agreement. Yonhap
Members of Samsung Electronics’ labor unions began mobile voting on a tentative agreement reached between their leadership and management, the final phase before the two sides’ labor dispute is settled.
According to the unions, approximately 87,000 members of Samsung Electronics Labor Union (SELU) and National Samsung Electronics Union (NSEU) began casting their votes on the tentative agreement at 2 p.m. Friday. The voting will continue for six days until 10 a.m. Wednesday.
The tentative agreement will be finalized if a majority of union members eligible to vote participate in the ballot and more than half approve it. If the agreement fails to win majority support, it will be rejected and labor and management will have to go back to the negotiating table.
The agreement, reached Wednesday just hours before the unions were to launch a general strike, centers on distributing part of the company’s operating profit to employees as performance bonuses.
The bonus system consists of two categories. The first is Samsung’s existing overall performance incentive (OPI). The agreement states that the company will use 10 percent of operating profit as a pool while maintaining a payout cap of 50 percent of an employee’s annual salary.
Before the agreement, the company calculated the bonuses using a formula based on Samsung’s own metric, based on an economic value-added formula, which the unions have criticized as lacking transparency. Under the new agreement, the company’s Device Solutions (DS) semiconductor division will use operating profit instead, while the non-semiconductor division, the Device Experience (DX) division, will be allowed to choose between the existing formula and operating profit.
The second category is a “special management performance bonus” exclusively for the DS division. The agreement states that the bonus will be funded with 10.5 percent of a “jointly selected business performance indicator,” which the unions later confirmed refers to operating profit.
The bonus will be paid in the company’s treasury shares, with some of the shares subject to a lock-up period, but there will be no payout cap. Forty percent of this bonus will be distributed equally across the entire DS division, while the remaining 60 percent will be allocated differentially, based on each business department’s performance. Loss-making businesses will receive only 60 percent of the equally distributed portion, although the two sides agreed to suspend the penalty for one year.
Under this structure, employees from the memory chip business of the DS division could receive bonuses of up to around 600 million won ($398,900) this year.
Source: Korea Times News
