Alphabiz - Samsung Group Labor Unions Demand Fairer Bonus System, Citing SK Hynix Precedent

Photo courtesy of Yonhap News

[Alpha Biz= Paul Lee] Labor unions across Samsung Group are pressing management to improve the company’s performance-based bonus system, pointing to SK Hynix’s recent reforms as a benchmark for fairer compensation.



On the 30th, the Samsung Group Labor Union Alliance—representing unions from 13 Samsung affiliates—held a press conference in front of Samsung Electronics’ Seocho headquarters, calling for greater transparency and fairness in the company’s bonus system.



Union representatives highlighted SK Hynix’s “transparent performance-based compensation framework” as an example Samsung should follow. Earlier this year, SK Hynix’s management and labor union agreed to abolish the cap on the Profit-Sharing (PS) program and to distribute 10% of operating profit as bonuses.



Samsung, by contrast, calculates bonuses based on the Excess Profit Incentive (OPI, formerly PS), which incorporates Economic Value Added (EVA) as a key metric. EVA deducts capital costs—such as corporate taxes and investment expenses—from operating profit. As a result, even if operating profit is high, heavy capital expenditures can reduce EVA and, consequently, lower bonus payouts.

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)