Samsung Electronics Performance Bonus Agreement Passed with 73.7% Approval... Strike Crisis Officially Over

95.5% Voter Turnout Out of 65,593 Eligible Members
Enterprise-Level Union Records Overwhelming 80.6% Approval
DS Division's "Up to 600 Million Won Bonus" Officially Confirmed

The provisional wage negotiation agreement reached between Samsung Electronics management and labor has passed the union member vote on May 27. Just one week after a dramatic agreement was reached on May 20, the union also secured membership approval, fully resolving the largest-ever general strike crisis in Samsung Electronics' history.

Yonhap News Agency

The Samsung Electronics union joint bargaining team—which includes the Samsung Branch of the Korea Federation of Trade Unions (the enterprise-level union) and the National Samsung Electronics Union—announced on May 27 that the provisional agreement was confirmed with a majority vote in favor. Out of a total of 65,593 eligible union members, 62,616 (95.5%) participated in the vote, with 73.7% (46,142 members) voting in favor. Only 16,474 voted against.

By union, the enterprise-level union recorded a voter turnout of 96.5% (55,333 out of 57,332 members), with an approval rate of 80.6% (44,606 members), leading the agreement's passage. For the National Samsung Electronics Union, 89.0% of its 8,261 members (7,283) participated, but only 21.1% (1,536 members) voted in favor. Since 80–90% of the largest union’s membership is comprised of executives and employees from the Device Solutions (DS) division, high expectations for the special management performance bonus are thought to have been reflected in the vote. The voting was conducted from 2 p.m. on May 22 until 10 a.m. on this day. The joint bargaining team plans to formally sign the wage agreement with an official ceremony at 11 a.m. on the same day.

With the vote passed, the provisional agreement takes effect immediately. The core of the agreement is the maintenance of the existing Over-Profit Incentive (OPI) system, while establishing a new special management performance bonus for the semiconductor-focused Device Solutions (DS) division with no cap. With 10.5% of the DS division's business performance set aside as the source, unlimited compensation proportional to performance becomes possible, opening the way for memory division employees to receive up to 600 million won in bonuses.

The bonuses will be paid entirely in company stock, with one-third available for immediate disposal and the remaining two-thirds available for sale one and two years later, respectively. This system will be applied as a long-term measure for the next 10 years. However, as a prerequisite, the DS division must achieve annual operating profit of 200 trillion won each year from this year through 2028, and 100 trillion won annually from 2029 to 2035. Apart from the bonuses, the average wage increase rate for this year was set at 6.2%, to be applied retroactively from the March payroll. For Device eXperience (DX) division executives and employees, who are responsible for finished product business, company stock worth 6 million won will be provided separately as encouragement.

The union’s general strike directive, which had been put on hold until June 7, has also been officially withdrawn. Both inside and outside the industry, there is growing relief that the unprecedented labor-management conflict at Samsung Electronics, which escalated to a strike crisis, was resolved through dialogue, and that direct and indirect losses estimated between 10 trillion and 100 trillion won have been averted.

While the strike threat has been averted for now, there remain significant internal issues to resolve. The biggest problem cited is conflict between business units within the DS division due to differences in performance bonuses. According to the agreement, unlike the memory division, non-memory divisions such as the loss-making Foundry and System LSI units are expected to receive bonuses of only around 100 million won. While management and labor agreed to postpone penalties for loss-making units by a year, it appears inevitable that this will lead to a concentration of personnel in the memory division and a decline in organizational cohesion in the future. The DX division is also reportedly experiencing a sense of relative deprivation, making it urgent to bridge internal divisions.

Meanwhile, the 'Samsung Electronics Labor Union Together' (Together Union), which is centered on the DX division and was excluded from the recent negotiations, has filed for a court injunction to suspend the voting process, leaving the outcome as an immediate variable. Even after the approval, legal disputes and debates over legitimacy among the unions are likely to continue.

Externally, collective action by shareholders is also intensifying. The 'Korea Shareholder Action Headquarters', a Samsung Electronics shareholder group, plans to issue a national statement in front of the Gyeonggi Regional Labor Relations Commission at 12 p.m. today, emphasizing the illegality of performance-based bonuses linked to operating profit and announcing plans to initiate legal proceedings.

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