Samsung Union Holds Mass Rally Over Performance Bonus System

Samsung is seeing rising tensions between management and workers. The company’s labor union today held a massive rally demanding the removal of performance bonus caps and a larger share of profits. If this does not lead to an agreement, it plans to launch an 18-day strike next month.

Union demands an end to bonus caps, seeks a 15% profit share

According to Samsung union representatives, around 39,000 employees participated in the rally. This figure is around one-third of the company’s total workforce. The event, titled the “April 23rd Struggle Resolution Rally,” and held under the slogan, “Let’s Transparently Change and Realize the Abolition of Caps.”

The reason for the rally is the ongoing dispute over the company’s bonus system. As of now, performance bonuses are subject to a cap. This means even if the company sees strong financial results, there is a limit on how much employees can receive. As a result, the union is demanding that the company remove the cap on bonuses.

Furthermore, they want 15% of Samsung’s operating profit for employee bonuses. Industry forecasts suggest that the company could post an operating profit of around 300 trillion won this year. This will put the potential bonus pool at about 45 trillion won.

If the union fails to reach an agreement, it plans to launch a full-scale strike starting May 21 that could last 18 days. Such a strike could greatly disrupt operations, affecting around half of the company’s chip production at its Pyeongtaek factory. Industry analysts expect the company to post losses of 20 trillion won to 30 trillion won.

Earlier, Samsung’s management proposed a special award to employees in the memory business. It said bonuses will match or exceed those of competitors if the company secures the top spot in domestic sales and operating profit. However, the union did not like this offer and continues to demand that the performance bonus cap must be permanently removed.