Samsung Electronics Shareholders' Group: "Performance Bonuses Linked to Operating Profit Are Illegal... Board Must Convene Shareholders' Meeting"

On May 27, the Korea Shareholders Movement Headquarters announced plans to take legal action and called for the convening of a general shareholders' meeting regarding the tentative performance bonus agreement reached between labor and management at Samsung Electronics.

At a press conference held that afternoon at the Gyeonggi Regional Labor Relations Commission in Suwon, Gyeonggi Province, the Shareholders Movement Headquarters criticized, "Pre-allocating a certain percentage of pre-tax operating profit as a source for performance bonuses constitutes a disguised and illegal dividend under the Commercial Act, as it bypasses the proper dividend procedures."

On the 27th, at the Gyeonggi Regional Labor Relations Commission in Yeongtong-gu, Suwon-si, Gyeonggi-do, Min Kyung-kwon, CEO of the Korea Shareholders Movement Headquarters, announced the position regarding the tentative agreement on wage negotiations between Samsung Electronics labor and management. Korea Shareholders Movement Headquarters

They further pointed out, "Operating profit becomes subject to distribution only after taxes such as corporate tax are deducted, and even after taxes, the procedures for calculating distributable profits stipulated in Article 462, Paragraph 1 of the Commercial Act must be followed." They added, "Any outflow of company funds is a matter to be resolved by a resolution at the general shareholders' meeting and cannot be the subject of autonomous negotiations between labor and management."

Previously, on May 19, the Shareholders Movement Headquarters had submitted a request to Samsung Electronics to view and copy the shareholder registry. Once the shareholder registry is secured, they plan to send letters to domestic and foreign shareholders to inform them of these developments and ask for their participation in exercising shareholder rights.

In addition, they plan to urge institutional investors, such as the National Pension Service, to implement the stewardship code (principle of fiduciary responsibility), and are also considering filing a representative lawsuit for damages against directors for breach of fiduciary duty, in collaboration with the minority shareholder platform 'ACT.'

However, the lawsuit to confirm the invalidity of the performance bonus section of the tentative agreement, which was originally announced, will be postponed until after the results are released for the injunction filed by the Donghaeng Union to halt the vote on the agreement.

The Shareholders Movement Headquarters stated, "The purpose of filing a lawsuit is to ensure that, in accordance with the Commercial Act, the board of directors draws up legitimate agenda items for the general shareholders' meeting and gives notice of the meeting." They emphasized, "Here, the agenda should not be the collective bargaining agreement under the Labor Union Act, but rather the final proposal under the Commercial Act, which comprehensively reflects the opinions of management, the Device Solutions (DS) division, the Device Experience (DX) division, and non-union employees, as well as the company's management strategy and shareholder dividends."

Min Kyung-kwon, representative of the Shareholders Movement Headquarters, commented, "The government and labor authorities must clearly state whether they regard this issue as a matter under the Commercial Act or the Labor Union Act to prevent public confusion." He added, "If it is defined as a matter under the Labor Union Act, as a civic group, we may expand our struggle to include action against the government."

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