Samsung Links Chip Bonus to 10.5% Profit, Strike Suspended

According to Samsung Electronics, the company and its labor union have reached a provisional wage agreement, leading to the suspension of a planned strike that was originally scheduled to begin on May 21 and continue through early June.

Samsung confirmed in a statement that both management and labor had reached a tentative agreement on wages and collective bargaining terms following late-stage negotiations mediated by Korea’s Ministry of Employment and Labor. The union also announced that the strike action has been temporarily suspended after the breakthrough agreement was reached shortly before midnight local time.

The dispute had centered on performance-based compensation and bonus structures. The union had demanded the removal of existing bonus caps, a distribution of 15% of operating profit as employee bonuses, and formal inclusion of these terms in labor contracts. Samsung had previously proposed allocating 10% of operating profit to bonuses along with additional one-time compensation, arguing that its overall compensation package remained above industry standards and that higher demands would be difficult to sustain long-term.

Under the new provisional agreement, Samsung will retain its existing profit-sharing bonus system while introducing a new performance-based incentive scheme for its semiconductor division. The bonus pool will be funded by 10.5% of “agreed operating performance” and distributed across organizational levels, with 40% allocated to business divisions and 60% to specific operational units covering both memory and logic chip businesses.

Union representatives clarified that the performance metric refers to operating profit. The agreement also outlines a long-term incentive framework tied to ambitious profitability targets for Samsung’s chip division, including annual operating profit goals exceeding 200 trillion won between 2026 and 2028, and 100 trillion won between 2029 and 2035.

Under the plan, employee bonuses will be issued in the form of company stock rather than cash, with after-tax distribution. Employees will be allowed to immediately sell one-third of the shares, while the remaining portion must be held for up to two years.

In addition to the revised bonus structure, Samsung has agreed to an average wage increase of 6.2% for the current year, along with improved childcare subsidies and housing loan benefits, further strengthening its employee compensation framework in the semiconductor sector.