The controversy over SK Hynix’s incentive pay was soothing… It spreads to Samsung and LG

SK hynix(125,000 0.00%)The controversy over the performance pay that started in is spreading throughout the business world.

According to industry sources on the 5th, SK hynix reached an agreement at the labor-management council the day before to link the index for calculating excess profit distribution (PS) from economic value added (EVA) to operating profit from next year. In addition, we decided to pay our stock shares to the members.

This is due to strong opposition from executives and employees and unions when SK Hynix announced that it would pay 400% of the basic salary (1/20 of the annual salary) in PS last year. This is because incentives were paid at the same level as in 2019, when performance was sluggish. SK Hynix’s operating profit last year increased 84% compared to the previous year. They also requested transparent disclosure of the PS’s calculation method.

On the 1st, the SK hynix union held a demonstration at the M16 completion ceremony attended by executives including SK Group Chairman Choi Tae-won, and an employee who announced that he had joined SK Hynix for four years openly’protests’ to all members, including SK Hynix CEO Lee Seok-hee. I even sent an email. Anonymous Community’Blind’ and Samsung Electronics(82,800 +0.36%) Posts for certification of career support for competitors such as those of competitors were posted one after another.

In response, Chairman Choi declared the return of his annual salary, and President Lee clarified the controversy over the incentive pay through an internal network announcement, but the controversy did not easily subside. Rather, it is known that hundreds of executives and employees expressed dissatisfaction by commenting on Lee’s notices under their real names. In the end, the company decided to introduce an employee stock ownership system that provides a benefit equivalent to 200% of the basic salary if approval of the board of directors declines along with the change in the PS calculation method. In-house welfare points are also paid 3 million points.

President Lee said through an in-house message after the labor-management agreement, “Since the announcement of the PS payment, we have heard more insider stories than ever before.” I sincerely apologize for this.”

SK Hynix seems to be closing the controversy over performance pay, but the embers are spreading to other companies. SK Telecom, another core subsidiary of SK Group(251,000 +1.62%) The union recently sent a letter to SK Telecom President Park Jeong-ho in the name of Chairman Hyeon-hee Jeon, raising a question about the incentives that are expected to decrease significantly from last year. On the 3rd, SK Telecom paid incentives to applicants only, but it was argued that the amount was less than expected among employees who received it.

There are voices of dissatisfaction inside Samsung Electronics, which was directly compared with SK Hynix. Samsung Electronics pays extra performance bonuses (OPI, former PS) differently for each business division, while Samsung Electronics paid 47% of its annual salary to the semiconductor (DS) division last year. Even though it led half of the company’s earnings, it is less than 50% of the smartphone (IM) division or the video display (VD) division. Last year, Samsung Electronics generated operating profits of 18.81 trillion won, 3.5 trillion won, and 11.47 trillion won in the DS, consumer electronics (CE), and IM sectors, respectively.

The display industry is also dissatisfied. Samsung Display’s OPI payment rate is 12%. Inside the company, compared to the VD division in charge of Samsung Electronics’ TV, there is a reaction saying “too few”. Samsung Display achieved the highest quarterly results in the fourth quarter of last year, with sales of 9.96 trillion won and operating profit of 1.75 trillion won. LG Display(23,000 -1.50%)Has recently been paying a personal personnel evaluation incentive (PI), but it is known that there is no PS again. LG Display was also in the red last year on an annual basis, but it broke the deficit after two years and recorded a surplus for the third and fourth consecutive quarters of last year.

Employees of LG Energy Solution (basic salary 245%) spin-off from LG Chem complained about the fact that they had less provisional incentives compared to LG Chem (300-400%), which was the same company, saying, “Last year, we made the highest performance ever, and we need reasonable compensation.” Officially filed. Last year, LG Energy Solutions turned to the black compared to the previous year with an operating profit of 388.3 billion won. LG Electronics(155,500 -1.27%)Is known to be paying incentives at the end of this month, but posts have already been posted on the blinds, such as what to do if the incentives are low.

Seongsu Bae, reporter of Hankyung.com [email protected]