Despite Semiconductor Slump
Samsung Electronics' DS Divsion and SK Hynix have decided to pay a generous performance-based bonus to staff, despite a big slump in memory semiconductors. Their decisions are in sharp contrast with the salary cuts and quarterly bonus payment suspension announced by Intel and Micron in the United States.
According to industry sources, employees of Samsung Electronics’ Digital Solution (DS) Division received 50 percent of their annual salary as an out performance incentive (OPI) in January 2023. The business division recorded an operating profit of only 270 billion won in the fourth quarter of 2022, down 96.9 percent from the previous year. As a result, its annual profit in 2022 stood at 23.82 trillion won, down 26.3 percent from the previous year.
However, the OPI rate remained at the same level as the previous year. In addition to the memory division, the same OPI rate was applied to employees of the foundry division and the system LSI division.
SK Hynix suffered an operating loss of 1,701.2 billion won in the fourth quarter of last year. Its annual operating profit came in at 7,006.6 billion won, down 43.5 percent from 12,410.3 billion won in the previous year. However, the chipmaker fixed its 2022 excess profit sharing (PS) rate at 820 percent. Accordingly, employees will receive 41 percent of their annual salaries as PS bonuses.
The reason why the two companies pay huge performance bonuses even in a slump is that they use a certain percentage of operating profit as the source of performance bonuses.
Industry observers say that this decision was made in order to prevent talented employees from leaving for other jobs and to block their organizations from being shaken and unstable.