Samsung Electronics Union Votes on Wage Deal to Avert Strike
Quick Look
- Samsung Electronics union members are voting on a wage deal to avoid a strike.
- The agreement includes a special semiconductor performance bonus of 10.5% of business earnings, paid in stock over 10 years, averting potential supply chain disruptions.
AI-generated summary
Why It Matters
Unionized workers at Samsung Electronics Co. began voting on a wage deal following a last-minute agreement that averted potential disruptions to the global supply chain. Labor and management had been deadlocked since late last year over performance-based bonuses tied to earnings from the tech giant's artificial intelligence-related semiconductor business amid the ongoing global memory chip boom.
By Kim Han-joo
SEOUL, May 22 (Yonhap) -- Unionized workers at Samsung Electronics Co., the world's largest memory chipmaker, began voting Friday on a wage deal following a last-minute agreement that averted potential disruptions to the global supply chain.
About 89,000 union members will cast their votes through next Wednesday on the tentative agreement reached just an hour before an 18-day strike was set to begin Thursday.
The agreement will be ratified if more than half of eligible union members participate in the vote, with a majority of those voting approving the deal. If the proposal fails to secure majority support, labor and management will have to return to the negotiating table.
Choi Seung-ho, head of Samsung's largest labor union, earlier said he expects the agreement to be approved.
Labor and management had been deadlocked since late last year over performance-based bonuses tied to earnings from the tech giant's artificial intelligence-related semiconductor business amid the ongoing global memory chip boom.
Under the deal, Samsung will allocate a special semiconductor performance bonus equivalent to 10.5 percent of business performance earnings, without a cap.
The special bonuses will be paid in company stock over at least 10 years, based on targets for the chip division to achieve more than 200 trillion won (US$132 billion) in annual operating profit from 2026 to 2028 and 100 trillion won from 2029 to 2035.
Of the total bonus pool, 40 percent will be allocated to the division as a whole, while 60 percent will be distributed to individual business units. A decision on how to divide the pool among loss-making divisions -- one of the most contentious issues during negotiations -- was postponed for one year.
Based on forecasts that Samsung's operating profit could reach 300 trillion won this year, the agreement could translate into bonus payouts of up to 600 million won for each of the 28,000 employees in the company's profitable chip division.
What to Watch
AI outlook — possibilities, not facts
The tentative agreement will be ratified by the union members.
Likely · Within days
Open Questions
- Will the tentative agreement be ratified by the union members?
- How will the decision on dividing the bonus pool among loss-making divisions be made in one year?
- What will be the exact impact of the bonus payouts on individual employees and the company's stock?
