"This Time, It's for Employees" Samsung Electronics Makes a Bold Move... How the Compensation Works

Samsung Electronics Acquires 2.5 Trillion Won in Treasury Shares
"For Employee Performance Compensation"

On January 7, Samsung Electronics announced that it will acquire 18 million shares of its own stock to provide performance-based rewards to its employees. The total purchase amount is approximately 2.5002 trillion won, and the share acquisition period will run from January 8 to April 7.

Yonhap News Agency

Samsung Electronics explained, "We are acquiring treasury shares to use for stock-based compensation, such as the performance share unit (PSU) program introduced last October and the performance incentives (OPI and LTI)."

The PSU program was newly established in addition to the existing excess profit incentive (OPI) system. Over the next three years, employees will be granted company shares based on the increase in the share price, with the amount of compensation increasing as the share price rises.

The payout multiplier, determined by the increase in share price, is calculated by comparing the share price as of October 15, 2025, with that of October 13, 2028. The payout is as follows: less than 20% increase, 0x; 20% to less than 40%, 0.5x; 40% to less than 60%, 1x; 60% to less than 80%, 1.3x; 80% to less than 100%, 1.7x; and 100% or more, 2x.

The Long-Term Incentive (LTI) program targets executives who have served for more than three years. It distributes rewards based on management performance over the past three years in annual installments over the next three years. Depending on performance, the amount can range from 0% to 300% of the average annual salary.

The OPI program allows for an annual payout of up to 50% of an individual's salary, within a limit of 20% of the excess profit, if the business division's performance exceeds the annual target. Since January last year, Samsung Electronics has decided to pay a portion of the OPI for executives in company shares as part of its efforts to strengthen responsible management.

Under the stock-based compensation system, executive directors are required to choose company shares for at least 50% of their incentives, executive vice presidents for at least 70%, and presidents for at least 80%. Actual payments are scheduled to begin this month.