Choi Seung-ho, head of the Samsung Electronics chapter of the Samsung Group Supra-Enterprise Union, answers reporters’ questions on Wednesday outside the venue for the second post-mediation meeting between Samsung Electronics labor and management at the National Labor Relations Commission in the Sejong Government Complex. Joint Press Corps
The Samsung Electronics (005930.KS) labor union reaffirmed its existing position, including its demand for institutionalizing performance pay, as last-minute negotiations with management continue.
Choi Seung-ho, head of the Samsung Electronics chapter of the Samsung Group Cross-Enterprise Union, told reporters during the second post-mediation meeting between Samsung Electronics labor and management at the National Labor Relations Commission (NLRC) in the Sejong Government Complex on Wednesday, “We will do our utmost to produce an agreement that can satisfy our members as much as possible.”
His remarks suggested the union would cooperate with the NLRC, which mediates the talks and plans to draw up a mediation proposal by reconciling both sides’ views. However, when asked whether the union still insists on institutionalizing performance pay, Choi maintained a firm stance, replying, “Yes.” The union is demanding that 15 percent of operating profit be paid as performance bonuses, that the cap on performance pay be abolished, and that this framework be institutionalized to apply beyond next year. Management has not accepted the demand for institutionalization.
NLRC Chairman Park Soo-keun, who said just before the meeting that “we will wrap up the negotiations on Wednesday if at all possible,” briefly stepped outside the meeting room and said, “A mediation proposal will have to come out in the evening,” adding that “items such as distribution ratios are included in today’s talks.” Asked whether the gap between Samsung Electronics labor and management had narrowed, he answered only, “A little.” The NLRC has set a goal of continuing the post-mediation meeting until 7 p.m. on Wednesday to draft a proposal both sides can accept.
Still, sharp differences remain over key issues including the size of the performance pay, the distribution ratios across divisions and business units, and institutionalization. Management has offered a compromise plan to provide an additional 9 to 10 percent of operating profit on top of the existing Overall Performance Incentive (OPI) — which pays up to 50 percent of annual salary when annual operating profit reaches 200 trillion won — for the Device Solutions (DS) semiconductor division.
Management is also pushing to lower the share allocated at the division level, in contrast to the union’s demand to distribute 70 percent of the performance pay pool at the division level and the remaining 30 percent among individual business units. The greater the share weighted toward the division level, the more the non-memory business units running operating losses would receive bonuses worth hundreds of millions of won, inevitably fueling fairness concerns relative to the Device Experience (DX) finished-products division, which receives relatively smaller compensation.
The post-mediation meeting resumes at 2 p.m. on Wednesday.