Samsung and SK Semiconductors Pay 'Half Annual Salary' Bonuses Even During Severe Cold and Ice Age (Comprehensive)

Samsung Electronics Pays 50% of Annual Salary · SK Hynix 41% Paid
Both Semiconductor Companies Desperate for Yield... Critical to Securing Talent
LG Electronics Focuses Heavily on New Businesses Like Auto Parts and LG Energy Solution

[Asia Economy Reporter Moon Chaeseok] Samsung Electronics and SK Hynix are drawing attention for generously awarding employee performance bonuses despite posting shocking earnings. Although their results were poor due to the global recession, it is interpreted that they made this decision out of a sense of crisis, believing it would be difficult to recover if they lost talent.

The Samsung Seocho Building in Seocho-gu, Seoul, on the 31st of last month. Photo by Hyunmin Kim kimhyun81@

According to industry sources on the 1st, Samsung Electronics' DS (Device Solutions) division set this year's OPI (Over Performance Incentive) at 50% of the annual salary. This was significantly higher than the 7% for the DX (Device Experience) division's home appliances business, as well as 37% for the Mobile Experience (MX) division, 27% for the Network division, and 24% for the Visual Display (VD) division.

[Image source=Yonhap News]

SK Hynix also decided on an over-profit sharing bonus (PS) equivalent to 820% of the base salary and notified employees internally. This corresponds to about 41% of the annual salary.

Performance bonuses are calculated based on the previous year's financial results after closing the accounts. Both companies paid exceptionally high performance bonuses last year despite the market being described as a 'harsh winter' or 'ice age.' Samsung Electronics at least justified the payment based on first-half performance, but SK Hynix's decision drew attention as it struggled throughout the year due to the acquisition of Solidigm (formerly Intel's NAND business division) and other challenges.

[Image source=Yonhap News]

Although not a semiconductor company, LG Electronics also awarded generous performance bonuses ranging from 100% to 550% of the base salary by business division. The VS (Vehicle Electrification & Electronics) division, which the company is promoting as a core business, had the highest payout rate at 550%. LG Energy Solution is also reported to have decided on a performance bonus of 870%, the highest level within the LG Group.

The reason advanced industrial companies are awarding such large performance bonuses despite the recession is interpreted as a measure to secure talent and boost morale. It signifies a decision made to prevent early talent outflow and stabilize the organization from disruption.

SK Hynix announced its earnings and performance bonus payment simultaneously on the day, stating, "The performance bonus payment is more of an encouragement message necessary to overcome the crisis than a reward." The company posted a loss of 1.7012 trillion KRW in the fourth quarter alone. This was the first deficit in 10 years since the third quarter of 2012.