Samsung Electronics will pay an additional special performance bonus of up to 40% to manager-level employees in its Semiconductor (DS) Division who received the highest grade in their job evaluations. The "top-performing Ko Cham (Director)" is expected to receive a performance bonus in the mid-1 billion won range. Considering future executive bonuses and further improvements in results, Samsung Electronics' burden of paying performance bonuses is projected to grow even larger.
According to electronics industry sources on the 12th, the DS Division at Samsung Electronics applies differential rates for special performance bonuses for CL4 (manager-level) employees based on their job performance (performance evaluation). Employees who received EM(A), the highest grade, are subject to a rate of 1.4 times the standard special performance bonus payout ratio. This is followed by ES(B) at 1.2 times, MT(C) at 1 time, MS(D) at 0.9 times, and NM(E) at 0.8 times, in that order.
Samsung Electronics categorizes employee ranks from CL1 to CL4. The differential payout rates based on performance evaluations for this special bonus apply only to CL4 employees and do not extend to other ranks. CL4 employees had already received their existing OPI (Over-Profit Incentive) differentially based on performance evaluations, and the same method is now being applied to the special performance bonus as well.
A manager-level employee working in the Memory Business Unit (based on an annual salary of 110 million won) is estimated to receive approximately 1 billion won in total performance bonuses, combining the special bonus, existing OPI, and TAI (Target Achievement Incentive). This estimate is based on Samsung Electronics' projected annual operating profit for this year of 37 trillion won, as forecast by securities firms.
In particular, employees who received the highest performance evaluation are expected to receive an additional 40% on their bonuses, bringing their total compensation to the mid-1 billion won range. It is reported that the EM grade is awarded to the top 10% of all employees. Samsung Electronics applies a salary cap, which sets an upper limit on base pay by rank; this year's salary cap for CL4 is 130 million won.
Samsung Electronics plans to pay out the special performance bonus entirely in company stock after deducting taxes, insurance premiums, and donations. The highest income tax rate of 49.5% (including local income tax) will be applied, and an insurance premium deduction of 4.967% is expected. Consequently, the actual amount paid in company stock will be 45.5% of the special performance bonus. A sale restriction will apply to two-thirds of the issued company stock.
The scale of Samsung Electronics' performance bonus payouts appears set to expand further. Securities firms project Samsung Electronics' annual operating profit at 55 trillion won next year and 60.8 trillion won in 2028. These figures already reflect costs associated with paying special performance bonuses. Samsung Electronics records performance bonus costs as provisions or similar items in its financial results.
Industry attention is also turning to the scale of executive performance bonuses. While the criteria for paying special performance bonuses to DS Division employees have been determined, the compensation structure for executives has not yet been announced. Industry insiders expect that executives will also receive substantial company stock compensation utilizing tools such as PSU (Performance-Linked Stock Compensation) and LTI (Long-Term Incentive).
In accordance with Commercial Act regulations requiring shareholder approval for the disposal of treasury shares, Samsung Electronics will propose a special performance bonus payout plan at its regular shareholders' meeting in March next year. The company intends to proceed with payment after completing related procedures, including board resolutions. Industry sentiment suggests that the likelihood of this agenda item being rejected at the shareholders' meeting is low.
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