Samsung Electronics Faces Employee Discontent Over Performance Bonuses

Samsung Electronics is facing escalating discontent among employees in its Device Experience (DX) division regarding performance bonuses. Despite an official apology from DX head Noh Tae-moon, discussions about a potential spin-off have emerged as tensions remain high.

On May 28, an anonymous post on a Samsung Electronics community called for the formal establishment of a committee to pursue the spin-off of the DX division, attracting significant attention. More than 1,100 employees have participated in a vote supporting the spin-off and sale of the division.

The compensation structure for DX executives has become a new point of contention. Samsung executives receive long-term incentives (LTI) in addition to the excess profit performance bonuses (OPI) distributed by individual divisions. The LTI, which can reach up to 300% of their salary based on the company's overall performance and stock price over the previous three years, is awarded to executives with over three years of service. Senior executives receive more than 50%, vice presidents over 70%, and presidents over 80% of their LTIs in company stock.

This structure has drawn criticism from regular employees in the DX division, who argue that they bear the brunt of poor business performance. One employee stated, "Why should only the staff bear the responsibility for poor performance?"

In fact, Noh received 22,679 shares of company stock as part of his LTI last July, valued at approximately 1.596 billion won based on the closing price of 70,400 won on the payment date. This was the largest amount among the 19 eligible executives. Choi Won-jun, head of the Mobile Experience (MX) division, received 473.22 million won (6,722 shares), while Yong Seok-woo, Noh's assistant, received 209.7 million won (2,869 shares).

A DX employee expressed frustration, saying, "Executives can secure multi-million won rewards through LTIs even if their OPIs are zero. Ultimately, only the employees are being sacrificed."

Although Noh issued an apology to address internal dissent, he is struggling to quell public sentiment. In an official message following the finalization of the labor wage agreement, he acknowledged that many employees likely felt alienated and deprived, expressing awareness of the serious reality facing the DX division.

Following Noh's message, online communities and internal chat rooms were flooded with comments demanding, "Don't just apologize; compensate us with bonuses," and "Recoup the investments poured into DS and split off DX." Some expressed skepticism, questioning whether a single apology would suffice.

There is also a growing movement to form a separate union focused on the DX division. As of this morning, the Samsung Electronics Labor Union, which has a majority of DX members, surpassed 16,000 members, a fourfold increase in just one week.

Lee Jong-hwan, a professor at Sangmyung University’s Department of System Semiconductor Engineering, emphasized the urgency of resolving internal conflicts, stating, "In a time when both semiconductors and finished products are facing fierce global competition, quickly mending internal divisions is a top priority. The management must ensure open communication and improve systems to regain the momentum for company-wide innovation."