Samsung SDS Scraps Performance Bonus Reform... First-Ever Majority Union Established (Comprehensive)

Performance Bonus Vote Secures Only 40% Approval—Majority Consent Not Reached
First-Ever Labor Union Established at Samsung SDS
Over 5,600 Members Join Within a Day of Formation

The proposed changes to the performance bonus system at Samsung SDS failed to pass after failing to obtain the consent of more than half of its employees. As the company pushed for the revision of its performance bonus system, Samsung SDS, which had maintained a no-union management policy, saw the establishment of its first majority labor union since its founding.

On July 8, Samsung SDS announced, "The proposed changes to the personnel system will not be implemented, as we did not meet the requirement for the majority consent of all employees needed for the system to take effect."

Samsung SDS Tower. Samsung SDS

A total of 55.6% of all employees participated in the vote. Among those who voted, 71.9% agreed to the proposed changes. As a result, the final approval rate based on the entire employee base was 40%, which fell short of the majority threshold.

Samsung SDS conducted a vote of all employees until midnight the previous day on a proposal to abolish the current cash incentive system (PI) and instead provide an annual performance bonus in the form of company stock equivalent to 20% of annual salary. The voting period, originally set to close on June 29, was extended once in response to employee feedback that the initial period was too short.

Employees opposed to the revision have raised concerns that the performance bonus calculation would be linked not only to operating profit and share price, but also to external indicators such as industry indices. They have also pointed out that, under the new system, the existing target incentive would be excluded from retirement pay calculations. Some voices have alleged that management was pressuring employees to vote in favor of the proposal.

As Samsung SDS management pushed for changes to the performance bonus system, the company saw the formation of its first-ever labor union. The Samsung SDS branch of the Super-Enterprise Union announced its establishment on July 6. The union was established in the form of a branch of the Super-Enterprise Union. Unlike individual unions, a branch of a single super-enterprise union can be formed without a separate establishment report.

In its founding statement, the union explained, "We established this branch to protect the rights and interests of employees working at Samsung SDS," adding, "It represents a determination by employees who have previously been unable to speak out to take the first steps toward asserting their rights and seeking a better work environment."

Following its formation, the Samsung SDS union saw a rapid increase in membership applications, reaching majority status within a single day. As of July 8, according to the union, the total number of members stood at 5,686. The union considered a majority to be 5,644, based on half of the 11,287 employees of the company as disclosed in last month's list of affiliates of large business groups.

On July 6, the day the union was launched, more than 2,000 members had joined within about two hours of the application opening. By around 1 p.m. the following day, membership had surpassed 4,000, and by 6 p.m. that same day, the union had crossed the majority threshold as applications continued to pour in.

On the morning of the previous day, the union officially submitted a request for collective bargaining to Junhee Lee, President and CEO of Samsung SDS, thus commencing the negotiation process. Management also posted a formal notice regarding the collective bargaining request that afternoon.

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