Train of Adoptions
Samsung Electronics made a final decision to extend its employees’ retirement age to 60 and adopt a peak salary. Many other subsidiaries of the Samsung Group will complete their wage system reform within this month.
Specifically, Samsung Petrochemical, Samsung Total, Samsung Engineering and the construction division of Samsung C&T have made the decision. And Samsung Everland, Samsung Display, Samsung SDI, Samsung Electro-Mechanics, and the general trading division of Samsung C&T are about to do so. “The official announcement of the introduction of the extended retirement age and salary peak is likely to be made before the end of this month,” said an executive member of the group.
Samsung Electro-Mechanics is planning to hold an information session for its employees next week. Cheil Industries, which has applied a peak salary to some of its workplaces, is currently discussing the introduction of the new systems to all of its employees as well. Under the circumstances, the majority of Samsung’s subsidiaries are likely to adopt the systems within this month.
According to the wage system reform plan of Samsung Electronics, the retirement age is extended to 60, while the annual salary is cut by 10% from the previous year’s total for employees aged 55 or older. They can be paid 90 million won at 56, 81 million won at 57, 73 million won at 58, 66 million won at 59 and 60 million won at 60, if they received 100 million won at 55.
The Samsung Group’s overall performance incentive (OPI) and profit sharing (PS) incentive systems are going to be changed to be based on salary. The amounts of the incentives are expected to be reduced along with the peak salary.