 |
Members of the Shareholder Activism Association hold placards during a rally in front of the residence of Lee Jae-yong, chairman of Samsung Electronics, in Yongsan District, Seoul on May 21. The group announced plans for legal action, calling the company’s tentative wage agreement unlawful. (Photo = Yonhap News Agency) |
[Alpha Biz= Paul Lee] A shareholder advocacy group has strongly opposed a proposed profit-linked bonus agreement between management and labor at Samsung Electronics, raising concerns over potential violations of corporate law.
According to industry sources on May 27, the group—referred to as the Shareholder Activism Association—announced plans to take legal action, arguing that allocating a portion of operating profit to employee bonuses without shareholder approval could constitute an unlawful distribution of earnings.
The group claimed that the tentative agreement earmarks approximately 12% of pre-tax operating profit as a bonus pool, effectively bypassing statutory procedures for profit distribution. Under Korean commercial law, profits can only be distributed after taxes and must follow formal processes to determine distributable earnings, typically requiring shareholder approval.
The organization argued that such arrangements could infringe upon shareholder rights, emphasizing that decisions involving the outflow of corporate funds should not be determined solely through labor-management negotiations.
In response, the group has requested access to the company’s shareholder registry to mobilize investors and is considering further legal measures, including a derivative lawsuit over potential breaches of fiduciary duty by company directors.
The group also urged institutional investors, including the National Pension Service, to exercise stewardship responsibilities. It warned that similar compensation structures emerging across other major companies could raise broader legal and governance concerns.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
