Samsung's New Compensation Model Raises Concerns Over Profit Sharing Samsung Electronics, South Korea's largest company, has avoided a total strike but has accepted a tentative agreement that ties a portion of its operating profit to long-term performance bonuses. This move has raised concerns that it could set a new standard for compensation practices across South Korean companies. According to industry sources on May 21, Samsung Electronics' management and labor union reached a dramatic agreement around 10:30 p.m. the previous day, postponing a planned total strike and agreeing on wage and performance bonus terms. The agreement will be put to a vote among union members from May 23 to 28. The anticipated first strike in the company's history has been halted. However, if the agreement passes the union vote, Samsung will be obligated to pay special management performance bonuses annually for the next ten years, contingent on achieving a minimum operating profit threshold. This effectively institutionalizes the allocation of some operating performance to long-term compensation. Allowing bonuses for loss-making divisions poses a larger issue. During negotiations, both sides reportedly found common ground by recognizing a certain level of distribution for loss-making units, deferring penalties for one year. Despite management's insistence on the principle of rewarding performance, they ultimately conceded. Professor Hwang Yong-sik of Sejong University expressed concern, stating, "Institutionalizing performance bonuses in loss-making situations could undermine the principle of meritocracy. Compensation should be the result of performance, and broadly recognizing losses could lead to moral hazard, increased cost rigidity, and weaken companies' investment capacity." In the business community, there are concerns that this agreement could serve as a 'new normal' for labor relations in South Korea, given the tendency of local companies to benchmark Samsung's practices. A precedent has been set where unions may demand a share of corporate profits. Despite government mediation, the agreement tilted in favor of the union, raising the likelihood of similar demands in low-performing or loss-making divisions in the future. This is particularly concerning in cyclical industries such as refining, shipbuilding, batteries, automotive, and steel, where performance-based bonuses tied to peak results could severely impact corporate management. A representative from a major corporation noted, "Samsung has effectively served as a benchmark for the compensation system in Korean manufacturing. This agreement is likely to lead to other large companies facing similar demands, with unions arguing, 'If Samsung can do it, why can't we?'" If the tentative agreement is approved by union members, the total strike will be called off. However, the 'Samsung situation' may not be over but rather just beginning, as internal conflicts over performance bonuses and compensation pressures across industries are expected to intensify. Kim Yong-seok, a distinguished professor at Gachon University's Semiconductor School and a former Samsung employee, cautioned, "Fixing temporary performance due to market improvements into a decade-long system is quite risky, especially with a structure that distributes bonuses to loss-making divisions, which could weaken motivation across the entire organization." He added, "The compensation structure created by Samsung could influence other corporate unions, making it difficult to rule out demands for minimum compensation even in loss-making situations across other industries."* This article has been translated by AI. 2026-05-21 20:12:00

Samsung's Performance Bonuses Could Increase Severance Pay by Sixfold Samsung Electronics and its labor union have agreed to a performance bonus system that will allocate more than 10% of business performance as bonuses, including a special management performance bonus based on 10.5% of the semiconductor division's (DS) business performance, to be maintained for the next decade. While the company has specified conditions for bonus payments, such as achieving an operating profit of 200 trillion won in the DS division, concerns remain that these bonuses could be included in the average wage used to calculate severance pay, potentially increasing the company's severance obligations by more than eightfold, which could negatively impact the South Korean economy. According to industry sources on May 21, the special management performance bonuses agreed upon by Samsung and its union are not expected to be included in the regular wage calculations. The Supreme Court's full bench ruling in 2024 stated that for bonuses to be considered part of regular wages, they must meet criteria of regularity, uniformity, and fixity. The general consensus is that this agreement does not satisfy all three conditions. Specific conditions outlined in the agreement, such as achieving 200 trillion won in operating profit in the DS division from 2026 to 2028 and 100 trillion won annually from 2029 to 2035, along with unspecified minimum payment amounts and the variability of the total fund based on 10.5% of business performance, do not qualify as 'value of labor' according to recent court rulings on regular wages. Despite the expectation that the special management performance bonuses will not be included in regular wages, there are concerns that they could still be factored into average wages in the future. Severance pay is calculated by multiplying the average wage over the last three months before retirement by the length of service. If bonuses amounting to several hundred million won are included in the average wage, the severance pay burden on companies could increase significantly. Recently, the Supreme Court ruled that if bonuses are predetermined based on individual employee standards and exhibit a degree of 'fixity,' they should be considered in the calculation of average wages for severance pay. If Samsung's promised separate bonuses are perceived as predetermined wages, they could indeed be included in average wages. A legal expert noted, "If this agreement is explicitly stated in the collective bargaining agreement and operates for ten years, the court may interpret that the payment obligation has been institutionally confirmed beyond mere practice. In this case, there could be an increase in lawsuits from retirees claiming average wages." A simulation conducted by Aju Economic Research based on the performance bonuses calculated under the Samsung Electronics labor agreement indicates that the average severance pay per employee could increase sixfold compared to current levels. Assuming an average annual salary of 100 million won and one year of service, the severance pay per employee, currently at 8.2 million won, could rise to 56.7 million won, reflecting a 592% increase when factoring in the special management performance bonuses. When converted into severance pay based on years of service, the severance pay for employees at the assistant manager and manager level with five years of service would increase from 41 million won to 283.5 million won when including bonuses. For employees with ten years of service (senior manager and department head level), severance pay would rise from 82 million won to 567 million won, and for those with twenty years of service (senior managers and executives), it would increase from 164 million won to 1.134 billion won. Last year, Samsung Electronics had 78,000 employees in the DS division, with an average length of service of 12 years. This implies that Samsung could face an additional severance pay burden of 582 million won per employee. The total severance pay liability could increase from approximately 8 trillion won to 45 trillion won, a 463% rise. While the likelihood of this scenario materializing is low, given the court's ruling and the assumption of all employees leaving, it raises concerns within the business community about potential legal disputes in the future. Looking ahead, a key issue will be the extent to which the conditions for performance bonuses are linked to labor outcomes. An industry source commented, "The specific conditions proposed by Samsung, such as achieving 200 trillion won in annual operating profit in the DS division, are dependent on external factors like the AI semiconductor big cycle and surging memory prices, rather than labor outcomes. If bonuses are paid under such circumstances, the connection to labor compensation may be diluted, making it less likely to be included in average wages."* This article has been translated by AI. 2026-05-21 20:06:35

Samsung Electronics Reaches Wage Agreement Amid Performance-Based Pay Focus Samsung Electronics has reached an agreement on wage and collective bargaining negotiations this year. The fact that both labor and management found common ground amid prolonged conflicts and the potential for strikes is a positive development. This resolution could signal a meaningful shift in the industrial landscape, demonstrating that a leading domestic company can find solutions through negotiation rather than extreme confrontation. However, for this agreement to be regarded as a true success, it must also gain the trust of shareholders and investors, beyond merely satisfying labor interests. In recent years, Samsung has emphasized a performance-based compensation system. The goal is to differentiate rewards based on performance and contributions rather than seniority and tradition, thereby enhancing the organization’s innovative capabilities. In the context of intensifying global technological competition, this approach is seen as an unavoidable choice. It is natural for companies competing in the global market to manage labor costs as an investment linked to productivity rather than merely an expense. The challenge lies in whether this performance-based system instills confidence in the market that it is indeed generating results. If the expansion of compensation appears unrelated to performance and leads to increased fixed costs, investors are likely to express concern. Samsung Electronics is currently facing a challenging reality. Despite expectations for a recovery in the semiconductor market, the competitive landscape remains fierce, and the burden of future business investments is growing. In this context, the market's criteria are straightforward: do increased costs lead to enhanced competitiveness and profitability? Particularly regarding this compromise, some market observers have raised concerns that the principles of performance-based pay may have been compromised. While it is possible for a company to adjust its compensation system for short-term organizational stability and internal satisfaction, if this process occurs without clear principles and explanations, the market may interpret it as a signal of rising costs and declining profitability. This sensitivity among domestic and international institutional investors to corporate governance and capital efficiency is a key factor. It is crucial that the goal of labor-management compromise does not become an end in itself. The purpose of a corporation is not merely to satisfy specific stakeholders but to achieve sustainable growth. Employees seek stable compensation and growth opportunities, while investors expect reasonable returns on their capital. A structure that satisfies only one side is unlikely to endure. Particularly for publicly traded companies, operations rely on the trust of both labor and capital. For Samsung to successfully implement its performance-based pay experiment, what follows this agreement is even more critical. The company must transparently explain to the market the performance metrics on which compensation is based, how additional labor costs are linked to productivity, and the impact on research and development and business competitiveness. Without proving this through numbers and results, performance-based pay risks being criticized as merely a cost-driven approach. Moreover, performance-based pay should not simply be a system of giving more or less bonuses. It must create a belief that the entire organization can compete and grow under fair standards. A structure that employees can accept and investors can trust is essential for long-term competitiveness. When there is confidence that performance is linked to compensation, and that these results will lead to increased corporate value, the market will support the company’s choices. Shareholders are not merely entities demanding short-term profits. There must be capital that supports future investments and patiently awaits the company’s long-term growth for innovation to be possible. Conversely, companies must respond to investors with predictability and responsible management. Trust is built not only during earnings announcements but also at critical decision-making moments. Samsung's recent labor-management compromise marks not an end but a beginning. Only when performance-based pay is accepted by employees and secures market trust can it truly become a competitive advantage. The assurance must be that the compensation is not just for performance but is designed to create performance. Achieving satisfaction among labor and trust from capital is the challenge Samsung must prove it can meet.* This article has been translated by AI. 2026-05-21 20:01:08

Hanwha Q CELLS to Supply 640,000 Solar Modules for Major Solar Project in Jeollanam-do Hanwha Solutions Q CELLS (hereafter Hanwha Q CELLS) will supply high-efficiency solar cells and modules manufactured in South Korea for a record-breaking 400MW solar power project by Korea Southern Power at a single domestic site. According to industry sources on May 21, Korea Southern Power plans to develop a large-scale solar power plant in the Munnae-myeon area of Haenam-gun, Jeollanam-do. The project aims to complete the solar power plant on approximately 1.4 million pyeong (4.79 km²) of land by June 2028. On May 20, Korea Southern Power selected a preferred bidder for the EPC (engineering, procurement, and construction) contract for this project. Hanwha Q CELLS plans to install about 640,000 solar modules using cells produced domestically. The solar cells and modules supplied for this project will be entirely produced at Hanwha Q CELLS' largest manufacturing facility located in Jincheon, Chungbuk. Yoo Jae-yeol, head of Hanwha Q CELLS' Korea division, stated, "By supplying high-efficiency solar cells and modules made in Korea for this large-scale project, we have an opportunity to demonstrate the technological competitiveness of our solar industry. Especially with the government's policies to expand renewable energy and the ongoing trend to utilize domestically produced products, we expect positive impacts on the restoration of the domestic solar industry ecosystem and increased related investments." He added, "We hope this project will revitalize the solar market, which has been stagnant, and establish a virtuous cycle leading to increased investments and job creation, laying the foundation for the growth of South Korea's renewable energy industry." Meanwhile, Hanwha Q CELLS has launched a solar module recycling initiative called EcoRecycle by Q CELLS in the United States, operating a recycling center near the solar hub in Cartersville, Georgia, capable of processing up to 500,000 discarded modules annually. The company is actively expanding its business both domestically and internationally, providing resource recycling solutions.* This article has been translated by AI. 2026-05-21 19:52:35

AJP Watch: Samsung still unpatched as CEO and union plea exposes internal strife SEOUL, May 21 (AJP) -Samsung Electronics may have pulled back from the brink of an unprecedented general strike with a dramatic last-minute wage agreement, but the company is not yet out of trouble as internal divisions continue to simmer over a bonus structure that many employees say has shattered the sense of balance inside South Korea’s biggest company. The tentative 2026 wage agreement, reached late Wednesday after marathon negotiations involving the labor ministry, still requires approval through a union vote scheduled to conclude next Wednesday. Its fate remains uncertain as resentment spreads among non-chip employees and even within parts of the union itself. The deal prevented what would have been an 18-day strike involving tens of thousands of workers, largely from Samsung’s semiconductor operations, at a time when the company is riding a historic AI-driven boom in memory chips. But the structure of the agreement — particularly the scale of payouts for semiconductor employees — has exposed widening tensions between Samsung’s highly profitable chip division and its other businesses. In an unusually direct message to employees on Thursday, Samsung Electronics Device Solutions chief Jun Young Hyun issued a formal apology and appealed for unity, acknowledging the strain created during months of labor conflict. “Although there were differences during the negotiations, we confirmed that our shared commitment to the company remained the same,” Jun said in a companywide message. “What matters now is moving beyond the time of conflict and joining forces as one.” He also described the agreement as “a new beginning” and urged employees to support the ratification process for “the future of both the company and its members.” Union leadership separately moved Thursday to appease internal complaint and muster support ahead of next week’s ratification vote. Choi Seung-ho, head of Samsung Electronics’ chapter of the Samsung Group Super Enterprise Labor Union who led the negotiations, described the tentative agreement as “the result that the union and the joint struggle headquarters achieved with their best efforts,” adding that the vote outcome would serve as “a report card” from members on the union leadership. Choi stressed that the dispute went beyond wages, calling it “a fight where the company’s principles and the union’s principles collided head-on", assuring that the union “continued to demand the values it pursued until the very end.” The back-to-back appeal reflected growing concern inside Samsung that the deal, while avoiding a disruptive strike, may have deepened internal fractures. Under the tentative agreement, Samsung will maintain the existing Overall Performance Incentive system capped at 50 percent of annual salary across both the semiconductor-focused Device Solutions (DS) division and the Device Experience (DX) division, which includes smartphones, TVs and home appliances. But the agreement also introduces a separate special management bonus exclusively for DS employees, funded with 10.5 percent of semiconductor operating profit without an upper ceiling. With Samsung’s semiconductor business generating record profits from the AI memory boom, the numbers quickly became explosive inside the company. Samsung reported first-quarter operating profit of 57.2 trillion won ($38 billion), an all-time high, with the DS division alone contributing 53.7 trillion won. Industry estimates cited during negotiations projected that if the semiconductor division were to generate around 300 trillion won in annual operating profit, the special bonus pool could reach roughly 31.5 trillion won. Distributed among approximately 78,000 DS employees, some memory division workers could receive payouts approaching 600 million won based on a 100 million won salary. Meanwhile, employees in the DX division — contributing roughly 3 trillion won in first-quarter operating profit — would remain limited to the existing capped incentive system, with maximum payouts around 50 million won. The widening gap has triggered backlash among non-chip employees who argue the compensation structure now treats Samsung as two separate companies under one name. According to industry officials, dissatisfaction inside the DX division has intensified since last month, with some employees leaving the union in protest. Membership in Samsung Electronics’ largest union reportedly fell from around 77,000 members to closer to 70,000 recently. Some DX union members have also filed for an injunction challenging the legitimacy and procedural fairness of the negotiations, arguing the bargaining process disproportionately reflected the interests of semiconductor workers. Even Samsung’s attempt to soften the divide by offering DX employees company stock worth about 6 million won has done little to ease frustration, with some workers viewing the measure as symbolic compensation compared with the potentially massive DS payouts. The internal discord highlights how the AI boom is reshaping traditional corporate compensation structures across Korea’s technology sector. While semiconductor profits have surged amid explosive demand for high-bandwidth memory and AI infrastructure, other divisions inside Samsung continue to face slower growth, higher costs and tariff pressures. The imbalance has increasingly complicated how one of the world’s largest conglomerates distributes rewards among businesses operating under vastly different market realities. Samsung has avoided the immediate economic and reputation damage from a prolonged strike that had alarmed investors, policymakers and global supply-chain partners alike. Shares hit all-time high on Thursday by gaining more than 8 percent and lifting the main index by the same scale. Inside the company, the harder test of uniting employees across Samsung’s sprawling businesses amid uneven fruits of AI bonanza persists. 2026-05-21 19:51:42

Actress Kim Kyu-ri's Home Burglarized; Roommate Injured A burglary occurred at the home of actress Kim Kyu-ri. According to a report by Channel A on May 21, a man in his 40s unlawfully entered Kim's residence in Bukchon Hanok Village, Jongno District, Seoul, around 9 p.m. the previous night, attempting to commit robbery before fleeing the scene. A woman living with Kim discovered the intruder, who reportedly attempted to steal money but was caught in the act and fled. During the incident, the woman sustained injuries. Police began their pursuit after receiving a report from Kim's side stating that the burglar was trying to bind them. The suspect surrendered to authorities approximately three hours after the incident. This incident follows a similar case in November of the previous year, when actress Nana was also victimized by a home invasion alongside her mother. Kim Kyu-ri has previously showcased her traditional hanok home on a television program, where she also shared insights into her work as a Korean artist. As more programs feature celebrity homes, concerns are rising about the potential for such residences to become targets for violent crimes like burglary. Meanwhile, police have arrested the man who turned himself in on charges of robbery and injury, and they will determine whether to seek an arrest warrant after investigating the premeditated nature of the crime.* This article has been translated by AI. 2026-05-21 19:51:00

SK On Transitions Tennessee Battery Plant to Independent Operation SK On has completed the restructuring of its battery joint venture, BlueOval SK, with Ford and has transitioned its Tennessee plant to an independent operation. On May 21, SK On announced that it has rebranded the former BlueOval SK Tennessee plant as SK On Tennessee and has entered a phase of sole operation. As a result of this restructuring, SK On will fully own and operate the Tennessee plant, while the two Kentucky plants under BlueOval SK will remain owned and operated by Ford. SK On anticipates that the conclusion of the joint venture will reduce its debt burden by approximately 54 trillion won. Given the current high-interest environment, the company expects to save about $18 million (approximately 27 billion won) annually in interest costs. Additionally, the annual depreciation costs associated with the Kentucky plants, estimated at around 33 billion won, are also expected to decrease. A representative from SK On stated, "This restructuring of the joint venture will strengthen our financial structure and enhance the efficiency of our production operations in the U.S. We aim to actively respond to changes in the North American market based on our newly secured independent production base." In the first quarter of this year, SK On reported revenues of 1.7912 trillion won and an operating loss of 349.2 billion won. However, with the recent acquisition of 284 megawatts (MW) out of a total of 565 MW in the bidding for the second ESS (Energy Storage System) central contract market, combined with the end of the joint venture, the company expects to see improvements in its performance both domestically and internationally.* This article has been translated by AI. 2026-05-21 19:48:24

Yang Hyang-ja Launches Campaign for Gyeonggi Province Governor, Promises 100,000 Jobs Yang Hyang-ja, the People Power Party candidate for Gyeonggi Province governor, held a campaign launch event in Suwon on May 21, officially kicking off her campaign for the June 3 local elections. At the event near Paldalmun, Yang expressed her determination, stating, "We are beginning our journey to find our three dreams," which include the dream of Gyeonggi Province, the dreams of youth and children, and the aspirations of the People Power Party. To achieve the dream of making Gyeonggi Province a 'world-class economic city,' she promised to reach a per capita Gross Regional Domestic Product (GRDP) of 100 million won. Her plan involves transforming the region into a hub for semiconductors, artificial intelligence, materials, components, equipment, biotechnology, information technology, cultural tourism, and advanced industries. Yang also unveiled her vision to create 100,000 jobs with an annual salary of 100 million won, aiming to attract young people to Gyeonggi Province to pursue their dreams. Additionally, she expressed her commitment to restoring the glory of the People Power Party, which she believes is loved by all. After the event, she visited Nammun Market, appealing to merchants by saying, "I will create a Gyeonggi Province that generates wealth." Meanwhile, on May 18, Yang began a hunger strike in front of the Samsung Electronics Pyeongtaek Campus, urging a labor-management agreement. Samsung Electronics reached a tentative agreement late on May 20 after failing to reconcile differences over performance bonus criteria. Following this development, Yang ended her hunger strike and shifted her focus to active campaigning.* This article has been translated by AI. 2026-05-21 19:45:57

Combatting Fake News: Platforms with 1 Million Users and 100,000 YouTubers Targeted The Broadcasting and Media Commission (BMC) has unveiled a revised enforcement decree of the Information and Communications Network Act aimed at curbing the illegal distribution of false information. The key points of the revision include targeting platforms with an average daily user count (DAU) of over 1 million and specifying criteria for increased damages applicable to creators with over 100,000 subscribers. On May 21, the BMC held a discussion on the revised enforcement decree at the Broadcasting Hall in Mokdong, Seoul, focusing on systematic responses to false information. A major point of contention is the definition of a "large-scale information service provider." The BMC has set the threshold for regulation at platforms with a DAU of over 1 million in the past three months. Shin Young-kyu, head of the BMC's Broadcasting and Telecommunications User Policy Bureau, explained, "We chose DAU over monthly active users (MAU) due to its social impact and existing legislative precedents." The regulation will apply to social networking services (SNS), online communities, video-sharing platforms, and open markets that facilitate information exchange among users. Shin noted, "Private conversations, such as KakaoTalk group chats, are not included, but open chat rooms are subject to regulation." The criteria for increased damages will also be limited to revenue-generating information publishers with a certain level of influence. The enforcement decree defines those who earn income from delivering facts and opinions through advertisements or sponsorships and have posted information at least three times in the last three months. For SNS creators, including those on YouTube and Instagram, the threshold is set at 100,000 subscribers and a minimum of 100,000 views in the previous three months based on content virality standards. Additionally, the role of the "Transparency Center," which is being promoted as a key support organization for responding to false information, was also a significant topic of discussion. The BMC plans to operate the Transparency Center as a hub connecting the government, platforms, and fact-checking organizations. In line with the revised Information and Communications Network Act, the government will not directly assess the authenticity of posts or decide on their removal. Instead, the focus will be on supporting private fact-checking and platform self-regulation both technically and administratively. The Transparency Center will also analyze "transparency reports." The BMC intends to review the number of reports and processing cases published by platforms, as well as the outcomes of appeals, to evaluate the effectiveness of responses to false information. The BMC plans to gather public feedback on the legislative proposal until May 27, followed by regulatory review and committee approval in early to mid-June, with a goal of obtaining Cabinet approval by the end of June.* This article has been translated by AI. 2026-05-21 19:43:23

Huh Tae-jung Criticizes Lee Jang-woo's Campaign Promises Ahead of Local Elections Huh Tae-jung, the Democratic Party's candidate for Daejeon mayor, criticized Lee Jang-woo, his opponent from the People Power Party, on May 21, stating that he only has "absurd campaign promises and no achievements." He urged voters to judge the remnants of past turmoil in the upcoming local elections on June 3. Speaking at a campaign launch event in Daejeon's Eunjeong Cultural Street, Huh declared, "I will restore the collapsed citizens' rights and focus on people's livelihoods," adding, "I will be a mayor who serves the citizens, not one who rules over them." He called on supporters to make June 3 a day of victory for himself, district mayors, and council members. Jung Cheong-rae, the Democratic Party's campaign chair, praised Huh, saying, "Those who have experienced leadership do it well," referring to Huh's previous roles as a district mayor and his work in the Blue House. He emphasized that if voters entrust the position to Huh, he would perform even better than during his past tenure. Additionally, Jung expressed his affection for Huh by creating a short poem, stating, "Huh Tae-jung loves Daejeon like a mountain. He will work hard. Please vote for him." 2026-05-21 19:40:20