SEOUL, August 21 (AJP) - "Seocho is next!"
That was the promise Samsung Electronics workers made on July 16, when thousands gathered outside the company's Suwon campus for the first rally organized by the newly formed Donghaeng union.
A little over a month later, they made good on it.
Thousands of workers descended on Samsung's Seocho headquarters in southern Seoul on Friday, demanding answers over the deteriorating fortunes of the company's consumer-electronics businesses and what they see as an increasingly unequal system for sharing Samsung's gains.
The protest came on the same day Samsung unveiled plans for the largest shareholder return in its history, expecting to return between 90 trillion won ($65 billion) and 110 trillion won this year through dividends and share buybacks and cancellations. The company also approved the purchase of about 15 trillion won worth of treasury shares for employee compensation.
The announcements added another layer to a dispute increasingly centered on how Samsung distributes the fruits of its growth — among shareholders, employees and businesses whose fortunes have diverged sharply during the artificial intelligence boom.
"Take responsibility for management failures!"
"Stop cutting jobs!"
"Communicate with employees!"
The chants rose from the road outside Samsung's headquarters as workers dressed largely in black raised fists and placards toward the office towers.
Other slogans were considerably more personal.
"Park Hak-kyu, Chung Hyun-ho step down."
One banner carrying Samsung Electronics Chairman Jay Y. Lee's image appealed directly to the group leader to "please listen to DX too."
By 5 p.m., police estimated about 2,100 people had joined the rally, while Donghaeng put attendance at more than 3,500, saying workers continued arriving after the event began.
The gathering was Donghaeng's second large-scale demonstration since its inaugural Suwon rally and marked a shift in tone.
What began as anger over a vast compensation gap between Samsung's booming semiconductor division and its struggling consumer businesses is increasingly turning into a broader challenge to the way the company is being managed.
"We did not come all the way to Seocho simply to demand more money," the union said in remarks delivered to reporters.
"We came to ask why Samsung Electronics' DX division has reached this point, who made these decisions and who will take responsibility for their consequences."
Beyond 1,000 shares
Donghaeng, whose membership is concentrated in Samsung's Device eXperience (DX) division, has demanded that the company revisit this year's wage agreement and devise compensation equivalent to 1,000 Samsung Electronics shares for each DX employee.
But union leaders on Friday sought to push back against portraying the dispute as simply a demand for a larger payout.
"Stop hiding behind the number 1,000," the union said. "What we are demanding is not the number 1,000 itself."
Instead, it said management should explain why DX's past contributions have not been adequately reflected in compensation, why executives are rewarded based on company-wide performance while rank-and-file workers are judged by individual business units and why the consequences of management decisions fall on employees through cost-cutting and workforce reductions.
Asked separately by AJP how the 1,000-share figure had been calculated, a union official acknowledged that it was not based on a precise financial formula.
"The conclusion from our internal discussions was that around 1,000 shares per employee would be appropriate," the official said.
"It was less a precise calculation than a determination that this was an appropriate level."
The dispute traces back to Samsung's wage settlement in May.
Under the agreement, workers in the semiconductor-focused Device Solutions division became eligible for a special management performance bonus funded by 10.5 percent of designated business performance, without a fixed payout ceiling.
Employees in the highly profitable memory business could receive dramatically larger compensation if the current AI-driven chip boom persists, although final payouts have not yet been made.
DX employees, meanwhile, received Samsung shares worth about 6 million won each under a separate compensation arrangement.
Donghaeng argues that the agreement effectively created a two-tier compensation system inside Samsung.
The union says smartphones, televisions and home appliances helped sustain Samsung through repeated downturns in the cyclical memory-chip industry, only for those contributions to be discounted once AI demand sent semiconductor profits soaring.
Friday's message, however, went further.
Donghaeng accused management of repeatedly responding to deteriorating profitability with cost reductions rather than investment.
"Before AI, it was excessive material-cost and expense reductions," the union said.
"After AI, management began talking about workforce efficiency under the name of AX."
It accused executives of cutting materials, investment and eventually jobs while failing to take responsibility for the strategic decisions that produced the current situation.
The union pointed specifically to Samsung's struggles in high-bandwidth memory, or HBM, as a warning of what can happen when investment and technological shifts are misjudged.
"We have already experienced a major crisis in semiconductors surrounding HBM," Donghaeng said.
"When we failed to seize the shift in the AI market in time and lost the lead in the HBM race, we saw how quickly even a world-leading company can find its competitiveness under threat."
'No response from Roh Tae-moon'
The rally also reflected frustration over what union officials describe as a near-total lack of communication from senior management.
Donghaeng said Samsung's leadership has yet to give a substantive response to its repeated requests for dialogue.
"We still have not received a response from anyone, most importantly from Roh Tae-moon," one union official told AJP, referring to the head of Samsung's DX division.
"Roh has not presented any countermeasure or communicated with us. He is simply remaining silent."
The official added that Roh's position itself illustrates what the union views as a structural problem inside Samsung.
"Roh Tae-moon is the head of the division, but structurally there is very little he can decide on his own," the official said.
The comment underscored why Friday's protest targeted Samsung's Seocho headquarters rather than another DX workplace.
The union's demands have increasingly moved beyond individual business-unit management toward Samsung's central decision-making structure.
Among the executives singled out in chants were Park Hak-kyu, head of Samsung Electronics' Business Support Office, and Chung Hyun-ho, his predecessor who now serves as an adviser to Chairman Jay Y. Lee. Workers called on both to step down, directing their anger toward Samsung's central management apparatus.
Workers and shareholders find common ground
The growing fight over Samsung's compensation system took an unusual turn even before the rally began, when Donghaeng sat down with a shareholder activist group — traditionally a constituency that might be expected to resist demands for larger employee payouts.
At around 2:30 p.m., Donghaeng leaders and the Korea Shareholders' Activism Association held their first joint briefing near Samsung's Seocho headquarters.
Donghaeng acting chairman Son Jong-hyun and policy planning chief Baek Soon-an met the shareholder group's head, Min Kyung-kwon, exchanging handshakes before separately outlining their positions.
The meeting did not amount to a joint rally or formal alliance.
Rather, the two sides found common ground over what they see as flaws in the process through which Samsung's May wage agreement and performance-pay arrangement were reached.
"We agree that the previous wage negotiations were neither legitimate nor fair," Son said.
"Whether we can align on the details will have to be discussed in future meetings, but our assessment of the fundamental unfairness of the negotiations is the same."
Baek stressed that Donghaeng was not opposed to workers receiving performance-based compensation itself.
"We are not saying that employees should not receive the results or rewards they deserve," he said.
"But from Donghaeng's perspective, both the process through which the agreement was reached and the outcome are very difficult to accept."
The shareholder group approaches the issue from a markedly different direction.
Min argued that decisions involving the distribution of Samsung's overall earnings should, where shareholder approval is required, be put before a general meeting rather than determined solely through labor-management negotiations.
"Shareholders are not shareholders of any particular union. They are shareholders of Samsung Electronics as a whole," Min said.
"The distribution of Samsung Electronics' overall performance is something shareholders should be able to approve."
He argued that the May 21 tentative agreement and May 27 final agreement should be treated as invalid, criticizing both the union that negotiated the deal and Samsung management for handling what he views as a matter involving the disposition of corporate profit.
Hours later, Samsung announced the record shareholder-return plan.
Its board approved total shareholder returns of 90 trillion won to 110 trillion won for 2026, potentially about five times the company's previous annual record of 20.3 trillion won in 2020. Samsung plans to distribute about 30 trillion won in cash dividends in the third quarter, with the remainder to be determined after full-year results are finalized.
The plan is part of Samsung's 2024 to 2026 shareholder return policy, under which it pledged to return 50 percent of free cash flow to shareholders. Including this year's planned distributions, cumulative returns over the three-year period are expected to reach between 120 trillion won and 140 trillion won.
The shareholder group welcomed the prospect of a large return to investors but maintained its criticism of Samsung's performance-pay system, arguing that the allocation of tens of trillions of won in performance-related compensation warrants shareholder scrutiny.
That left Donghaeng and the shareholder activists in an unusual position: they disagree over who should ultimately receive Samsung's earnings, but agree that the process used to determine how those earnings are distributed needs to change.
For now, however, the common front remains limited.
"This was our first meeting," Son said. "As our administrative and legal procedures move forward, we may discuss whether there are areas where we can align with the shareholders. There may not be. It is too early to say."
Protest spills onto Gangnam streets
At around 4 p.m., the rally moved onto the streets.
Workers marched along the stretch between Gangnam Station and Samsung's Seocho headquarters, temporarily occupying lanes along one of Seoul's busiest commercial corridors.
Traffic backed up as police restricted one or two lanes along sections of Gangnam-daero. Horns sounded intermittently as cars tried to navigate around the procession, and arguments broke out between some motorists and people near the march route.
The disruption came at the beginning of Friday's evening rush hour and drew complaints from some commuters.
The rally has also faced criticism on a separate front.
Samsung and its unions already concluded this year's wage negotiations in May, and Donghaeng has not separately secured the right to take industrial action.
Critics have therefore questioned whether holding a mass gathering during normal working hours without completing procedures required for industrial action amounts to an improper attempt to circumvent labor rules.
Donghaeng has rejected that characterization, saying participation was voluntary and workers could use company leave programs such as annual leave or "D-day" leave rather than refuse scheduled work.
The union on Friday emphasized that it intended to remain within legal boundaries.
"Donghaeng will fight to the end using every legitimate method permitted by law," it said.
"We are not fighting to bring Samsung down. We are fighting because we cannot simply watch Samsung, which we helped build, be damaged by bad decisions."
The dispute is unfolding as DX itself faces difficult operating conditions.
The division posted an operating loss of around 800 billion won in the second quarter, its first quarterly loss since Samsung adopted the current divisional structure in 2021, squeezed in part by sharply higher memory and component costs.
That has fueled criticism that demanding potentially billions of dollars in additional compensation is difficult to justify when the underlying business is loss-making.
Donghaeng counters that focusing narrowly on the division's current earnings ignores its historical contribution to Samsung and, more importantly, avoids the question of who should bear responsibility for the decisions that led to the deterioration.
'Next is Hannam'
The rally ended with another warning.
A month earlier in Suwon, workers had answered "Seocho" when asked where they would go next. On Friday, the answer changed.
"Today was Seocho. Next is Hannam," the union declared, referring to the Seoul neighborhood where Samsung Chairman Jay Y. Lee resides.
A union official told AJP the choice was deliberate.
"DX has been speaking, but management, including Roh Tae-moon, has shown no intention of listening or communicating," the official said. "If we go to Hannam, executives will have no choice but to pay attention."
The union said the point was ultimately to force Samsung's top leadership to confront the dispute.
As workers began dispersing from the streets around Seocho, the message from the stage was no longer centered solely on the size of a bonus.
The questions came on a day when Samsung promised to return as much as 110 trillion won to its shareholders, underscoring the increasingly difficult balance the company faces over how to distribute the rewards of its AI-driven growth while addressing frustration among the employees who say they have been left behind.
A month after taking its first protest to Suwon, Donghaeng has now carried those questions to Samsung's headquarters.
If management remains silent, the union says it intends to carry them closer still.
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