Samsung chip workers near deal for large profit-linked bonuses

In short: Samsung has reached a tentative union agreement that would make large, profit-linked bonuses very likely for many employees in its semiconductor business.

What happened

Samsung and a labor union representing workers in its semiconductor division have reportedly agreed to a bonus plan tied to the chip unit’s profits. The agreement was described as narrowly avoiding a strike, and the union was expected to vote on it soon after the announcement.

Under the reported terms, Samsung would set aside 10.5% of profits for stock bonuses and add another 1.5% in cash. The plan would run for 10 years, but only if profit targets are met.

Based on projected profits, some reports estimate the average payout in the chip unit at about 513 million won per employee, and other estimates put it closer to 600 million won. Employees would reportedly be allowed to sell one-third of the shares right away, with the rest sold in installments over two years.

Why it matters

This deal highlights a growing divide inside big companies that have both fast-growing and slow-growing businesses. Samsung’s chip division is expected to benefit from rising demand for memory chips used in AI systems (think of memory as the short-term workspace a computer uses to handle tasks). Workers in other Samsung divisions, and at other major South Korean firms, may see much smaller bonuses or none at all, and comparisons can raise pressure in future pay negotiations.

Source: NYTimes