Seoul (AFP) – A group of Samsung Electronics shareholders on Thursday vowed legal action against a tentative deal between the South Korean chip giant and its largest labour union that averted a major strike. The last-minute agreement on bonuses — which union members will vote on — was struck late Wednesday, with plans for an 18-day strike from Thursday put on hold until further notice. The dispute takes place against the backdrop of a global artificial intelligence boom that has turbocharged Samsung’s business while boosting national growth and the stock market.
Around 50,500 workers had been set to walk off production lines as anger flared over how the company distributes its massive profits. Under the tentative deal between Samsung and its union, wages will rise, and special bonuses will partly be paid in company stock over 10 years. That is conditional on the chip division achieving more than 200 trillion won (US$130 billion) in operating profit each year between 2026 and 2028, then 100 trillion won until 2035.
The Korea Shareholder Action Headquarters, a shareholders’ group, on Thursday staged a rally protesting the deal near the residence of Samsung Electronics chairman Lee Jae-yong. Negotiations over operating profit-linked bonuses were not passed in a shareholders’ resolution, and therefore have no “legal validity” under the current commercial act, they said. The group vowed to “use all legal means available” to “block any company fund disbursement” based on the deal if it is concluded by “bypassing” these required procedures.
Samsung memory chips are found in everything from consumer electronics to computer processors — with its next-gen, high-bandwidth models used to scale up AI data centres. Samsung in April said first-quarter operating profit soared roughly 750 percent year-on-year, while its market capitalisation topped $1 trillion for the first time this month. The prospect of a strike had raised concern over the economic impact on South Korea, where semiconductors account for about 35 percent of exports.
The labour union said Wednesday that all of its members — around 70,000 staff — would participate in a vote on the tentative deal to be held between May 23 and May 28. The government hailed the outcome of last-hour negotiations, which were mediated by the labour minister. The tentative deal introduces a new bonus pool for employees in the chip division, equivalent to 10.5 percent of the division’s business performance, with no payout cap. Of the total bonus pool, 40 percent will be allocated across the division as a whole, while 60 percent will be distributed based on the performance of individual business units.
The union had argued that workers at rival South Korean chip giant SK Hynix received bonuses last year that were more than three times larger than those paid at Samsung. The union’s lawyer said Samsung has seen a talent drain to its rival and a rise in union membership due to what workers describe as a “lack of transparency” in the bonus system. Samsung shares surged Thursday, up 8.2 percent in afternoon trade in Seoul.
© 2024 AFP
