Samsung Electronics and its labor union have reached a tentative wage agreement after four rounds of marathon negotiations, successfully averting a strike.
According to industry sources on May 21, the two sides finalized the "2026 Wage and Performance Bonus Tentative Agreement" at 10:30 p.m. the previous day, deciding to postpone the general strike that the union had threatened. The key element of this agreement is the resolution of the contentious performance bonus issue through the introduction of a stock payment system and a 10-year formalization.
The performance bonus for the semiconductor (DS) division, which was the main point of contention, will now include a new "Special Management Performance Bonus" separate from the existing Excess Profit Performance Incentive (OPI), applicable for the next 10 years. This compromise addresses the union's demand for a performance bonus system while alleviating the company's concerns about financial burdens.
Initially, the union sought a separate demand for 15% of operating profit but ultimately agreed to a rate of 10.5%, which aligns with competitors' levels. In return, the union successfully insisted on the removal of a cap on the payment rate, securing a practical benefit.
The OPI system will remain unchanged, as the company expressed caution about altering it due to concerns over future investment capacity and potential impacts on the industry. Ultimately, they opted to maintain the current system without modifications.
The allocation ratio for the performance bonus, which faced last-minute difficulties, was agreed upon at 40% for the overall division and 60% for individual business units. Consequently, 40% of the funds will be evenly distributed among three business units, while 60% will be allocated based on performance. Given the current management situation, a significant portion is expected to be weighted towards the memory division.
The wage increase rate was settled at a total of 6.2%, combining a basic increase of 4.1% with a performance increase of 2.1%. This increase will be retroactively applied to salaries from March of this year. Additionally, improvements in welfare measures were included, such as the introduction of a housing loan system, increased childbirth and congratulatory payments, and enhancements to shift work compensation.
Thanks to the dramatic agreement between both sides, the worst-case scenario of production disruptions in the semiconductor sector has been avoided. The tentative agreement will be finalized through a vote among union members scheduled from 2 p.m. on May 22 to 10 a.m. on May 27.
* This article has been translated by AI.
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