Hyunjoo Jin reports from Seoul. Samsung Electronics union members just signed off on a bonus pay agreement. This prevents a massive walkout. But it deepens employee divides. Big problems ahead.
Two unions for the world’s biggest memory chip producer confirmed the vote on Wednesday. Seventy-four percent of 62,616 workers approved the deal. It’s done.
This government-brokered agreement followed a bitter five-month fight. It brought relief. It also brought alarm. South Korea is rattled.
Samsung drives roughly a quarter of the nation’s exports. An 18-day strike, involving 48,000 workers, would have been catastrophic. It would have crippled the economy. Global chip supplies would suffer. Disaster averted.
But the deal itself is unusual. It’s only the second time a major South Korean company has committed in writing. They’re giving employees a fixed percentage of operating profit. This goes against tradition. Bonuses usually come after corporate taxes. Not here.
Specifically, 10.5% of Samsung’s semiconductor operating profit goes to special bonuses. Only for chip workers. This raised eyebrows.
South Korean President Lee Jae Myung expressed concern. Business groups are worried. Academics, too. Their major fear? Other unions will demand similar terms. Hardline stances could emerge. A ripple effect is possible.
Individual shareholders formed a group. They threatened a lawsuit. Their argument? This arrangement is unlawful. It bypassed shareholder approval. Big error.
Seo Ji-yong, a Sangmyung University business administration professor, weighed in. The deal reduces shareholder distributions. It might invite legal scrutiny. Fiduciary duty to shareholders is a real thing. The Commercial Act could be a problem.
Samsung management faces a summer of discontent. The deal created internal friction. They must address it.
Park Ji-soon, a Korea University law professor, stated it plainly. “Bridging internal labor divides will be Samsung’s biggest task.” It’s a massive challenge.
The deal emerged under pressure. Rival chipmaker SK Hynix offers sky-high bonuses. Samsung wanted to narrow that gap. The agreement primarily benefits workers in the memory chip division. AI investments fueled massive profits there. Some of these workers could pocket around $416,000 this year. That’s a lot of money.
