Samsung's chip makers say 47% bonus isn't enough

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Samsung's chip makers say 47% bonus isn't enough

Samsung Electronics' office in Seocho-dong, southern Seoul. [YONHAP]

Samsung Electronics' office in Seocho-dong, southern Seoul. [YONHAP]

 
Chip engineers at Samsung Electronics and other major corporations have joined the protest against the annual bonus system after a rift at SK hynix erupted over the issue.
 
The labor union at Samsung brought up what they see as unfair bonus distribution in a recent meeting with management, requesting a more detailed explanation of how the ratio of annual bonuses is determined every year.
 
With the broad principle of paying up to 50 percent of annual salaries and capping the amount at 20 percent of excess profit, the tech company is known for giving generous bonuses.
 
But discontent has spread through from Samsung’s chip division, given that the business unit’s bonus ratio is set at 47 percent, lower than the display and smartphone departments’ 50 percent, despite the outsized profit made by the chip unit.
 
Last year, semiconductors accounted for 52.3 percent, or 18.81 trillion won ($16.8 billion), in operating profit out of 35.99 trillion won last year.  
 
The smartphone business raised 11.47 trillion won and consumer electronics raised 3.56 trillion won.
 
“A consensus has been made at the labor union that the incentive payment system should be improved,” said Jin Yoon-seok, head of Samsung Electronics’ union.
 
“But the management has drawn a line, saying that it’s an issue related to management,” he said.
 
Employees at SK Telecom also raised objections over their bonus, with the head of the labor union sending a letter expressing dissatisfaction with this year’s planned amount.
 
The head mentioned that this year’s estimated bonus based on last year’s performance appears to be significantly lower than the previous year, despite a steep growth in earnings.
 
The company’s net income was up 74.3 percent to 1.5 trillion won last year, while the annual operating profit advanced 21.8 percent to 1.3 trillion won.
 
SK Telecom CEO Park Jung-ho scrambled to ease tensions, saying that all members and management should make an effort to enhance corporate value.
 
The dispute surrounding bonus payment started at SK hynix, where employees challenged the bonus amount, saying that the percentage is the same as 2019, when operating profit at the unit was almost half the 2020 record.
 
The protest prompted SK Chairman Chey Tae-won to vow to donate some of his annual salary to employees at the chipmaker.
 
The labor union at SK hynix entered into negotiations with management on Thursday to discuss the controversial bonus payment system and how Chey’s salary could be distributed.
 
BY PARK HYUNG-SOO, PARK EUN-JEE   [park.eunjee@joongang.co.kr]
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