Samsung Unions Voted In Favor Of Deal That Will Give Chip Workers $400,000 In Bonuses

Samsung’s two largest unions have voted in favor of a wage agreement that will give the company’s chip workers up to $400,000 in bonuses this year. According to Yonhap News, 73.7 percent of the two unions’ 62,616 members voted to approve the deal during a six-day voting period that started on May 22. While the union hasn’t released formal numbers for the bonuses, Samsung is expected to rake in up to KRW 300 trillion in operating profit this year, which leads payouts of up to KRW 600 million ($400,000) for each of the 28,000 employees in the company’s chip division. 

Bloomberg says Samsung is slated to distribute KRW 40 trillion ($26.6 billion) for the payouts, and they average more around $340,000 per employee based on its calculation. Regardless of the actual amount, people in Samsung’s top moneymaking division will be getting bonuses around thrice as large as their annual pay. The company will be paying out the bonuses in company stock over at least 10 years, contingent on the memory division making at least KRW 200 trillion ($133 billion) in annual profit from 2026 to 2028 and KRW 100 trillon ($66 billion) from 2029 to 2035.

Samsung’s largest union threatened to walk out for an 18-day strike starting on May 21 after it failed to reach an agreement with the company over the issue of bonuses. The union has 48,000 members, most of whom work for the company’s chip division. A walkout could have had a huge impact not just on Samsung, but also on South Korea as a whole, seeing as the company accounts for 12.5 percent of the country’s GDP. South Korean Prime Minister Kim Min-seok said that he expected direct losses from the 18-day strike to reach approximately KRW 1 trillion ($669 million).

The parties reached a deal a mere hour before the strike was set to begin, with help from South Korean Labor Minister Kim Young-hoon who stepped in to serve as mediator. Despite the majority voting in favor of the agreement, Bloomberg reported that the bonus structure is causing tension and fueling resentment between colleagues. 

Samsung agreed to abolish worker’s bonus caps, as per the union’s demands, and to set aside 10.5 percent of its annual operating profits for the payouts. Workers in the chip division, which makes most of the company’s money, are getting 40 percent of the total bonus pool. Meanwhile, all the other divisions will have to divide the rest among themselves. Workers in Samsung’s smartphone, TV and home appliances units are only set to get around a KRW 6 million ($4,000) bonus, which is tiny compared to what the chip workers are getting. Within Samsung’s largest union, 80 percent reportedly voted for the wage agreement. But within the smaller union that represents more non-chip workers, only 21 percent voted in favor of it.