Samsung E&A has decided to implement a plan to pay part of its performance bonuses in company stock. This initiative follows the introduction of stock bonuses at Samsung Electronics and is expected to enhance stock prices while allowing employees to share in the company's value growth.
According to industry sources on November 10, Samsung E&A has established a policy to pay part of its performance bonuses, including the Over-Performance Incentive (OPI), in company stock and is awaiting board approval. The company has finalized its direction after reviewing various payment methods.
Employees will be able to receive up to 50% of their performance bonuses in company stock, with the option to choose the stock portion in increments of 10%. Those opting for stock instead of cash will also receive additional shares.
A plan for acquiring the company stock to be used for these bonuses has already been established. On October 22, Samsung E&A's board decided to buy back approximately 780 billion won worth of shares. Of this amount, 690 billion won will be retired to enhance shareholder value, while the remaining 90 billion won will be allocated for employee bonuses. The acquisition period runs from October 23 to January 22 of the following year.
This stock bonus initiative is significant as it links the company's growth with employee compensation. Employees can expect additional benefits from the increase in corporate value while holding the stock received as bonuses. The introduction of stock compensation reflects employees' confidence and expectations regarding the company's growth potential.
The stock buyback is also anticipated to support the stock price, as the company will create buying demand by purchasing shares directly from the market. Additionally, the plan to retire a substantial portion of the acquired shares further integrates employee compensation with shareholder returns.
The expansion of this compensation scheme is backed by improved performance. Samsung E&A reported a cumulative operating profit of 961.9 billion won and cumulative orders of 17.1 trillion won for the third quarter of this year, surpassing all previous annual targets. Consequently, the company has raised its operating profit forecast from 800 billion won to 1.4 trillion won and its order forecast from 12 trillion won to 19 trillion won.
Meanwhile, OPI is a representative performance compensation system of the Samsung Group, allowing for bonuses of up to 50% of annual salaries. Samsung Electronics also enabled employees to receive part of their bonuses in stock earlier this year, and Samsung Heavy Industries has already implemented a similar program.
* This article has been translated by AI.
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