[Alpha Biz= Paul Lee] Labor negotiations at Samsung Electronics have once again broken down, heightening the risk of a strike, as the union declared a suspension of talks despite the company’s proposal of what it described as “industry-leading compensation.”

On March 30, Samsung Electronics disclosed details of its 2026 wage negotiations through an internal notice. The company stated that it had proposed a special incentive plan guaranteeing employees in its semiconductor memory division compensation at or above the level of competitors if the division achieves top performance in both revenue and operating profit within the domestic industry.

Specifically, for the memory division, Samsung proposed ensuring performance-based bonuses at or above competitor levels for employees rated at the “D” grade if the division ranks No. 1 in revenue and operating profit this year. For loss-making divisions such as System LSI and foundry, the company offered up to 50% in excess profit incentives (OPI), with an additional 25% contingent on improved management performance—bringing the potential total to 75%.

OPI is typically paid when a business unit exceeds its annual targets, with a cap of up to 50% of an employee’s annual salary, funded within 20% of excess profits. Under the proposal, employees in the Device Solutions (DS) division could effectively receive bonuses exceeding the existing 50% cap.

However, the union has called for a structural overhaul of the bonus calculation system, including the permanent removal of the cap on performance-based incentives. According to the company, the union is demanding a system that allocates 10% of operating profit as a bonus pool, distributed 40% at the division level and 60% at the business unit level, and has suspended negotiations to press for these changes.

Samsung Electronics noted that applying the union’s proposal to the 2025 OPI framework would result in a significant reduction in payouts for certain divisions, with System LSI and foundry bonus rates falling from 47% to 11%.

The widening gap between labor and management positions has intensified concerns over a potential strike.

 

 

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