“Why should semiconductors get less incentives than smartphones and TVs?” (An employee of Samsung Electronics’ memory division)
On the 26th, Samsung Electronics announced the OPI (excess profit distribution) by division. OPI, formerly called’PS’, is Samsung Electronics’ representative incentive system. When a division’s annual performance is better than its target, the company pays OPIs to its employees within 20% of the excess profit. The maximum limit is 50% of your annual salary.
Samsung Semiconductor Incentive Pay 47%, “Why is it less than smartphone (50%)?”
The wireless division in charge of smartphones and the video display (VD) division in charge of TV received 50% of the annual salary as OPI. If you are a deputy or manager-level employee who receives an annual salary of 60 million won, you will get a bonus of around 20 million won without tax.
Employees entering the Samsung Seocho office building. Hankyung DB
Among the DS (semiconductor parts) divisions, the OPI of the memory/system LSI/foundry divisions in charge of the semiconductor business was set at ‘47% of annual salary’. When it became known that it was ‘3 percentage points’ lower than that of wireless and VD, semiconductor employees began to boil. It is said that complaints have been filed everywhere, “Why is there less OPI than wireless and VD?”
Samsung Electronics’ semiconductor employees said, “I don’t know why semiconductors make the most money, but I don’t know why they should get less than wireless and VD.” There were even talks such as “Did you have to cut 3%p from 50%?” and “My pride hurts.”
Last year, Samsung Electronics posted an operating profit of 18.81 trillion won in the semiconductor business. This is a 34.2% increase from 2019 (14.20 trillion won). The operating profit of the IM (IT and Mobile) division, which includes the wireless business unit, is higher than the operating profit (11.47 trillion won) and the CE (consumer electronics) division (3.56 trillion won) combined with the VD division and the home appliance division.
Of course, just because you made a lot of operating profit doesn’t mean you’re getting a lot of OPI. When selecting an OPI, it is known that how much it exceeded the’target’ set at the beginning of the year plays an important role.
However, Samsung Electronics semiconductor employees are not able to calm their minds easily. This is because of the idea that the performance of memory semiconductor prices in the second half of the year declined, the spread of a novel coronavirus infection (Corona 19), and the results achieved in fierce competition with US Micron, Qualcomm, and Taiwan TSMC are’undervalued’.
SK hynix even talks about’strike’ because of incentives
“It even talks about strikes.” (SK hynix manager level staff)
If the employees of Samsung Electronics’ semiconductor division were boiling, the employees of SK Hynix are on the verge of explosion. The atmosphere of the staff is unusual.
It has been since the incentive pay was set at ‘400% of the basic pay’ on the 28th of last month. If 400% of the basic salary is changed to the Samsung Electronics type, it is said to be at the level of ‘20% of the annual salary’. Manager-level employees with an annual salary of 60 million won will receive 12 million won.
The main gate of SK Hynix’s Icheon headquarters, Gyeonggi. Photo = Yonhap News
SK Hynix employees agree that the gap is wide with Samsung Electronics’ semiconductor employees who receive ‘47% of their annual salary’ as’incomprehensible treatment’. In terms of operating profit, the gap is wide, with 18 trillion won (Samsung Electronics Semiconductor) and 5.1 trillion won (SK Hynix).
However, considering the number of employees (approximately 50,000 Samsung Electronics Semiconductor and 28,8787 SK Hynix based on domestic employees in the third quarter) and facility investment (Samsung Electronics 32.9 trillion won, SK Hynix 9.900 trillion won as of 2020), ” It’s not that I couldn’t be determined,” says a story. From 2017 to 2019, the same level of incentive rate as Samsung Electronics was applied, and the gap was not as large as this year in last year, so the fluctuation of employees is not small.
There are even rumors that the SK Group’s breath has acted on this incentive decision. It means that in order to set last year’s operating profit to ‘5 trillion won or more’, incentives were cut a lot. An employee of SK Hynix said, “If there is a Seoul office of Micron in the United States (the world’s third largest DRAM company), I would like to move to a job,” he said. “The morale of nearby employees is falling on the ground.”
Inquiry about the disclosure of’incentive pay calculation method’ to the CEO
Samsung Electronics and SK Hynix employees are worried about’next year’. Despite struggling and achieving results this year, they did not receive the desired level of incentives, but it is said that it will be reduced further next year.
Some point out on the method of calculating the’black’ incentive pay. In common with Samsung Electronics and SK Hynix, it is not known how incentives are determined except for a few employees.
On the bulletin board in SK Hynix, a post of a 4th-year employee who publicly inquired about the’performance pay calculation method’ was posted. The content of the article is like this.
You may still be seen as a new employee in the fourth year, but I think that the joy and gratitude of joining the company and the trust that SK hynix shows to me is gradually decreasing, so I would like to write a message in my regret. (Omitted) 1. Can you disclose the calculation method and calculation method of the index called’EVA’, which makes you feel like paying incentives, and if it is impossible, I am curious about which part is difficult to disclose. 2. I am curious about what percentage of the maximum basic salary can be paid if the index is achieved as much as EVA every year. (Omitted) It is understandable that PS is not paid as much as competitors. If so, is the reason why the incentive pay is lower than that of’Silicon Works’ or’Wonik IPS’ is because of the introduction of the EVA standard?
In fact, Silicon Works, an LG-series semiconductor design company, paid 600% of the basic salary as an incentive on the 28th. Silicon Works’ sales last year were KRW 1,161.8 billion and operating profit of KRW 94.2 billion.
Envy of other companies “I wish I could receive incentives”
In the semiconductor industry, various opinions come out on the’performance pay crisis’ between Samsung Electronics and SK Hynix. “We understand the dissatisfaction of Samsung Electronics DS Division and SK Hynix employees in that employees should also share the fruits of the company’s achievements.”
The voice of envy is also loud. It means that they want to receive incentives every year like Samsung Electronics and SK Hynix employees. An employee of a semiconductor equipment company said, “I want to receive incentives even at 10% of my annual salary,” and said, “I only think I want to change jobs every January-February every year.”
Employees of Samsung subsidiaries also complained about the complaints of employees in the semiconductor business division of Samsung Electronics, saying, ‘Sound of fullness’. Samsung Display, which supplies LCD for TVs and OLED panels for smartphones to Samsung Electronics, is known to have an OPI of 12% of its annual salary, and Samsung Electro-Mechanics, which supplies MLCC, at 14%.
Reporter Hwang Jeong-soo [email protected]