SEOUL, January 16 (AJP) -South Korea’s two largest memory chipmakers, Samsung Electronics and SK hynix are rolling out handsome cash and stock rewards for their employees amid red-hot earnings and extended stock rally.
Samsung Electronics said its Device Solutions (DS) division, which oversees the company’s semiconductor operations, has set its excess profit incentive (OPI) at 47 percent of annual salary, according to an internal notice circulated this week.
The rate applies across memory, System LSI and foundry businesses. Based on Samsung’s average employee compensation of 130 million won as of March last year, the average bonus payout is projected at roughly 61 million won per employee.
OPI is paid once a year when a business unit exceeds performance targets set at the beginning of the year. The incentive can reach up to 50 percent of annual salary, within a cap of 20 percent of excess profit, and together with the target achievement incentive (TAI) forms the backbone of Samsung’s performance-based compensation system.
The DS division’s payout reflects a sharp turnaround in semiconductor profitability.
After entering recovery in the second half of last year, shipments rose rapidly across memory products, including high-bandwidth memory (HBM) and commodity DRAM.
In the fourth quarter, Samsung Electronics posted best-ever three-month operating profit of 20 trillion won. The chip division is projected to have contributed 80 percent of the profit.
The contrast with recent years is pronounced. The DS division’s OPI was set at 14 percent last year amid weak chip conditions and zero in 2023.
Within Samsung’s Device Experience (DX) division, the Mobile Experience (MX) business set its OPI rate at 50 percent, translating into an average payout of about 65 million won per employee. The higher rate reflects strong sales of the Galaxy S25 series and Galaxy Z Fold/Flip7, up from 44 percent in 2024.
OPI rates for the Visual Display (VD), Digital Appliances (DA), network and medical device businesses were set at 12 percent. Management support, Harman, the win-win cooperation center and the global CS center received 39 percent, while the production technology research institute was assigned 36 percent.
SK hynix will again operate a “shareholder participation program” this year, allowing employees to receive part of their annual profit-sharing (PS) bonus in company shares, following the program’s initial rollout last year.
According to industry officials on Thursday, the company announced the plan in an internal notice the previous day, with applications open through Jan. 22.
Under the program, employees can elect to receive between 10 percent and 50 percent of their PS in SK hynix shares, in 10-percentage-point increments. PS is paid once a year based on annual performance, with a ceiling of 50 percent of annual salary, equivalent to 1,000 percent of base pay.
For example, an employee earning 100 million won who opts to receive 50 percent of PS in shares would receive stock worth 50 million won. If the shares are held for one year, the employee receives an additional cash payment equal to 15 percent of the stock value, or 7.5 million won.
Unlike last year — when shares could be distributed in four installments in the fourth quarter based on prevailing stock prices — participants this year must receive all elected shares at once at the start of the year.
PS payments are expected as early as late January or early February. Under a revised labor-management framework, SK hynix scrapped its previous PS cap and now funds bonuses using the full 10 percent of the prior year’s operating profit. Of the calculated PS, 80 percent is paid in the current year, with the remaining 20 percent deferred over two years in 10-percent installments.
Future operation of the stock-based program could be influenced by a proposed third revision of the Commercial Act, which would require companies to retire treasury shares. The bill is scheduled for review at a National Assembly subcommittee meeting on Jan. 21, raising the possibility of legislative action later this month or in March.
Industry estimates widely put SK hynix’s operating profit for last year at nearly 45 trillion won. On a simple calculation, that level of profitability would translate into profit-sharing bonuses of roughly 136 million won per employee. SK hynix releases fourth-quarter and 2025 results on Jan. 29.
Samsung Electronics shares closed Friday 3.5 percent up at fresh record high of 148,900 won and SK hynix also revisited the peak of 756,000 won.
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