Samsung Electronics to Pay Executive Bonuses in Company Shares... Compensation Reduced if Stock Price Falls

Performance Bonuses and Stock Price Directly Linked for Shareholder-Centered Management
50-100% of Performance Bonuses for Managing Directors and Above Paid in Shares
If Stock Price Falls After One Year, Number of Shares Paid Will Be Reduced

Samsung Electronics will pay part of its executives' performance bonuses in company shares. If the stock price falls after one year, the number of shares paid will also be reduced. This measure aims to strengthen responsible management and stock price control.

On the 17th, Samsung Electronics announced through an internal notice that part of the excess profit incentive (OPI) for executives in 2025 will be paid in company shares.

Managing directors must receive 50% of their performance bonuses in company shares, vice presidents 70%, presidents at least 80%, and registered executives are required to receive 100% in shares.

Payment will be made in January 2026, one year later. Vice presidents and below cannot sell the shares for one year after payment, while the president group cannot sell for two years. Based on the contract date, sales are restricted for two years and three years, respectively.

If the stock price in January 2026 is lower than at the time of the contract, the number of shares paid will be reduced proportionally to the decline rate. For example, if the stock price falls by 10%, only 90% of the contracted shares will be received.

View of Samsung Electronics Seocho Building in Seocho-gu, Seoul. Photo by Yonhap News

This measure appears intended to clarify executives' goals and strengthen stock price management. Through stock price linkage, Samsung aims to expand shareholder-centered management. Such measures by Samsung Electronics are expected to lead to increased corporate value and stock price appreciation.

Samsung Electronics is also considering allowing regular employees to choose stock compensation starting in 2026. Stock compensation for employees will be optional, and reductions in payment amounts due to stock price declines will not apply.

On the same day, Samsung Electronics finalized and announced the OPI payment rates by business division. For the Device Solutions (DS) division responsible for semiconductors, which received 'empty envelopes' last year, most units including Memory, System LSI, and Foundry divisions were set at 14%.

The Mobile Experience (MX) division, which played a key role in supporting performance with strong sales of the Galaxy S24 series, was set at 44%, down from 50% last year.

The Visual Display (VD) division responsible for the TV business was set at 27%, while the Digital Appliances (DA), Medical Devices, and Network divisions were set at 9%. The Management Support Office, Harman Cooperation Team, and Samsung Research were set at 37%, and the Korea Headquarters at 34%.