By Kyu-seok Shim and Heekyong Yang<\/p>\n
PYEONGTAEK, South Korea, May 21 (Reuters) – Samsung Electronics’ shares surged on Thursday after it clinched an 11th-hour deal with its South Korean union to \u200cavert a strike, although the terms which included bonuses of around $416,000 for some workers \u200cgave rise to some concern.<\/p>\n
A planned 18-day strike by some 48,000 union members has now been suspended, while the agreement, which \u200bwas mediated by the government, is put to a vote between May 22 and May 27. The union’s leader has said he expects it to be ratified.<\/p>\n
The deal sparked relief across South Korea. Samsung accounts for about a quarter of the country’s exports and the planned strike was expected to inflict significant damage \u200cto the economy and dent global \u2060chip supply if it went ahead.<\/p>\n
Samsung’s shares and the benchmark KOSPI both rocketed nearly 8% higher in morning trade.<\/p>\n
SPECIAL BONUSES TO BE MOSTLY STOCK<\/p>\n
Ryu Young-ho, a senior \u2060analyst at NH Investment & Securities, said that while investors were relieved that the strike appeared to have been averted, the agreement was not entirely positive as it had resulted in substantially higher labour costs.<\/p>\n
On the upside \u200bfor Samsung, \u200bthe plan to pay performance bonuses in stock rather \u200bthan cash could lower the immediate financial \u200cburden on the company, he added.<\/p>\n
A union demand that 15% of operating profit be allocated towards bonuses was also pared back.<\/p>\n
Under the deal, Samsung is expected to set aside about 10.5% of operating profit for special bonuses for the chip division, which houses its memory and logic chip businesses, according to the union.<\/p>\n
A document showed these bonuses would be paid in company stock for at least 10 years \u200cand conditional upon the chip division achieving more than 200 \u200btrillion won ($135 billion) in annual operating profit from 2026 to \u200b2028 and 100 trillion won from 2029 \u200bto 2035.<\/p>\n
A memory chip worker with a base salary of 80 million won, \u200cfor example, is expected to receive a bonus \u200bof around 626 million \u200bwon or $416,000 this year, mostly paid in stock, a union source said, declining to be identified.<\/p>\n
Samsung Electronics’ chip division chief Jun Young-hyun urged staff in a letter seen by Reuters to “leave \u200bbehind this time of conflict” and \u200cunite to strengthen the company’s global competitiveness and long-term growth.<\/p>\n
($1 = 1,500.8000 won)<\/p>\n
(Reporting by Kyu-seok \u200bShim in Pyeongtaek, Heekyong Yang, Hyunjoo Jin, Heejin Kim and Cynthia Kim in Seoul; \u200bEditing by Ed Davies, Miyoung Kim and Edwina Gibbs)<\/p>\n","protected":false},"excerpt":{"rendered":"By Kyu-seok Shim and Heekyong Yang PYEONGTAEK, South Korea, May 21 (Reuters) – Samsung Electronics’ shares surged on…\n","protected":false},"author":2,"featured_media":28092,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[2464,127,276,223,1484,18761],"class_list":["post-28091","post","type-post","status-publish","format-standard","has-post-thumbnail","category-samsung","tag-performance-bonuses","tag-samsung","tag-samsung-electronics","tag-samsung-group","tag-south-korean","tag-union-members"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/28091","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=28091"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/28091\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/28092"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=28091"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=28091"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=28091"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}