A tentative wage agreement between Samsung Electronics and its labor union was approved on the 27th, with 73.7% of union members voting in favor. It is fortunate that the worst-case scenario—a factory shutdown that could have amounted to self-harm amid the global semiconductor war—was averted. Yet this agreement leaves Korean society with a significant challenge. Under the deal, Samsung Electronics' semiconductor division will pay special bonuses funded by 10.5% of operating profit over the next 10 years. However, it is wrong that profitable non-semiconductor divisions are effectively excluded from these special bonuses, while loss-making semiconductor units have been granted a path to receive substantial bonuses. The decision to pay a certain level of bonuses even to loss-making divisions could set a dangerous precedent across industry, as it undermines the performance-based principle that "rewards follow results."
It is common sense that shareholders are compensated through profits tied to performance, while creditors and employees are compensated through interest and wages, respectively. An "asymmetric bonus" system—under which employees, already guaranteed stable wages, take no responsibility for poor performance yet still claim rewards from excess profits—is deeply problematic. A union that demanded bonuses of hundreds of millions of won during a semiconductor boom is unlikely to readily accept wage cuts or restructuring during a downturn. This is why shareholder groups have signaled lawsuits, arguing that the agreement—which fixes a set percentage of operating profit as bonuses—constitutes a breach of management's fiduciary duty to shareholders, sparking broader social conflict.
If the asymmetry of bonuses becomes entrenched, it could amplify conflicts not only within the company concerned but across industries, acting as a fatal toxin to the national economy. The bonus conflict that began in the semiconductor sector has already spread across industry to shipbuilding, automobiles, and information technology (IT). If a "bonus game of chicken" becomes widespread across industry, companies' capacity for future investment will diminish, and polarization in the labor market will only intensify. Rational compensation for performance is necessary, but it must be set at an appropriate level consistent with public common sense and with regard for the future of the national economy. It is time to flesh out, through public debate, a balanced compensation system that can sustain corporate competitiveness while driving sustainable growth. The political community must also move quickly to amend the Yellow Envelope Act, which provided the trigger for this conflict, and pass legislation that clearly defines the requirements for industrial action.
