Seoul, Sep 30
A coalition of unions from 13 Samsung Group affiliates was set to call for reforms in the group's performance-based bonus system on Tuesday, following a recent change in the system of local rival SK hynix, that is expected to sharply boost its bonus payments.
The alliance said it will demand greater transparency in the calculation of bonuses in a press conference set to be held in front of Samsung Electronic Co.'s Seoul headquarters, pointing to that of SK hynix as a model example, reports Yonhap news agency.
Earlier this year, SK hynix's management and union agreed to remove the ceiling on profit-sharing payouts and set bonus payments at 10 percent of operating profits.
Samsung Group currently uses the excess profit incentive (OPI) system, which calculates bonuses by deducting certain costs, such as taxes and investment spending, from the operating profit.
Under such a system, even when profits are high, the final bonus payout may end up being relatively small.
"Representing 300,000 Samsung workers, we decided to hold the press conference to urge Chairman Lee Jae-yong and Samsung Group to adopt a transparent bonus system similar to that of SK hynix," the alliance said in a statement.
Earlier this month, unionised workers of Samsung Electronics sent a letter to Chairman Lee Jae-yong, demanding the company improve the transparency of its bonus system.
In a document sent to the de facto head of Samsung Group, workers demanded the adoption of a more transparent bonus evaluation system and the abolition of the current framework based on economic value added (EVA).
"While SK hynix recently decided to allocate 10 percent of its annual operating profit to its bonus program, Samsung Electronics is still using the EVA method, which lacks transparency," the union said, according to the report.
—IANS
— IANS
Reader Comments
As someone working in IT sector, I know how frustrating opaque bonus systems can be. When companies make huge profits, workers should share in that success. Samsung should learn from competitors.
While I support worker rights, I hope this doesn't affect Samsung's competitiveness. As a shareholder, I'm concerned about sustainable profit margins. There should be a balanced approach.
Transparency in compensation is crucial for employee morale and retention. Many Indian companies could learn from this situation too. Well done to the unions for standing up for workers' rights!
The EVA system sounds like corporate jargon to hide how bonuses are calculated. Workers put in their hard work and deserve to know exactly how their performance translates to rewards. ðŸ‘
Respectfully, while I understand the workers' demands, Samsung has maintained its market leadership through careful financial management. Sometimes complex bonus structures are necessary for long-term business health.
This is why strong unions are important! 300,000 workers standing together can bring real change. Hope this inspires similar movements in Indian companies where bonus systems are often unclear. ✊
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