According to multiple industry sources on Friday, the company has begun a vote on a proposal to abolish its current cash incentive program and instead award annual performance bonuses entirely in the form of Samsung SDS shares.
The vote is scheduled to close on June 29.
The proposal follows a January Supreme Court ruling that Samsung Electronics' performance incentive (PI) should be treated as wages and counted when calculating severance pay. The ruling, which stemmed from a lawsuit filed by former employees, has prompted Samsung affiliates to reassess their compensation systems.
Industry officials said the move is intended to reduce the legal and financial burden that could arise if cash incentives continue to be treated as wages.
The proposal has nevertheless drawn criticism because a significant portion of the bonus calculation would be tied to market-driven factors beyond employees' control.
As of 1:10 p.m., shares of the data computing solutions arm of Samsung were 1.94 percent lower at 186,900 won.
In addition to changes in pretax operating profit, the calculation would reportedly take into account the company’s share price performance and the KOSPI IT Services Index, meaning bonus payouts could rise or fall with market conditions regardless of individual performance.
In response to questions from employees on the company's internal portal, Samsung SDS said the proposal would require the approval of a majority of employees before it could take effect.
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