Samsung Union Tentative Agreement: 11.5% of Operating Profit as Bonuses

The temporary wage agreement reached between Samsung and the union clearly defines the conditions for triggering special stock bonuses: if the annual operating profit of the chip division exceeds 200 trillion won from 2026 to 2028, or exceeds 100 trillion won from 2029 to 2035, special bonuses will be paid to employees in the form of stock. In addition, employees in the DX division will receive stocks valued at 6 million won each.

The agreement also stipulates a 6.2% across-the-board pay raise, with the bonus allocation ratio being approximately 11.5% of operating profit. This ratio is a compromise between the union's initial demand for 15% and management's offer of 10%, after several rounds of negotiations and game-playing.

The structure of the agreement is well-designed and meaningful. The threshold for triggering the special stock bonus is set in two stages, with the threshold for 2026 to 2028 being significantly higher than that for 2029 to 2035, which aligns with the current high prosperity cycle of Samsung's chip business. Samsung's operating profit increased by 750% year-on-year to 57.2 trillion won in the first quarter. If the strong momentum is maintained throughout the year, the threshold of 200 trillion won is not out of reach.

If this tentative agreement is ultimately approved by the union members, it will resolve the 18-day major strike scheduled to start on May 21. The union previously warned that the strike would cost Samsung more than 20 billion dollars and directly impact the production and supply of key AI chips such as HBM4. Whether the agreement can be smoothly passed through the internal vote of the union remains the key variable in the next steps.