Delivered to CEO Choi Joo-sun and Samsung SDI Management
Three Proposals Including "Introduction of Operating Profit-Based Performance Bonus"
On September 4, the labor union of Samsung SDI sent an official letter to Lee Jae-yong, Chairman of Samsung Electronics, demanding improvements to the company's incentive system.
According to industry sources, the Samsung SDI branch of the Korean Metal Workers' Union delivered the letter, titled "Fundamental Improvement of Samsung SDI's Incentive System," to Chairman Lee, Choi Joo-sun, CEO of Samsung SDI, and the company's management on the same day.
In the letter, the union pointed out, "Samsung, including Samsung SDI, currently maintains an excess profit incentive (OPI) system based on EVA (Economic Value Added), but the complex calculation formula and the lack of disclosure regarding the calculation process and figures have led to growing distrust." The union further stated, "SK Hynix ensures transparency by allocating 10% of its operating profit as the incentive pool."
On the same day, the SK Hynix labor union approved a tentative agreement for the 2025 wage negotiations, which includes using 10% of the annual operating profit as the incentive pool, paying 80% of it in the relevant year, and distributing the remaining 20% in two installments of 10% each over the following two years. The cap on incentives, previously set at up to 1,000% of the base salary (equivalent to 50% of the annual salary), has also been removed, and this standard will be applied for the next 10 years.
EVA is a calculation that subtracts the cost of capital (such as corporate taxes and investment funds) from operating profit. Even if operating profit is high, EVA can decrease if costs increase, resulting in a gap between actual performance and perceived compensation. The largest union at Samsung Electronics, the National Samsung Electronics Union, also raised this issue last July during the company's first-ever general strike since its founding.
The Samsung SDI union demanded the introduction of an incentive system based on operating profit, transparent disclosure of the incentive calculation process, and the effective operation of a labor-management consultative body. The union emphasized, "This is not a simple complaint, but an issue that threatens long-term competitiveness and sustainable growth."
The Samsung SDI union further stated, "This is not merely dissatisfaction with incentives, but an issue that threatens the very foundation of Samsung SDI's long-term competitiveness and sustainable growth. We stress that the demand for reforming the incentive system is not a mere dispute over interests, but an essential change to secure the company's long-term competitiveness and sustainability, and we urge a responsible decision at the Samsung Group level."
Samsung SDI did not provide a separate statement on the matter.
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