The 2026 wage and collective agreement signed by Samsung Electronics (005930.KS) on Nov. 27 is showing signs of escalating into a legal battle, as shareholders have signaled lawsuits, fueling conflict among labor, management and shareholders. Discord over the astronomical bonus agreement is spilling into the courtroom. Experts say a series of lawsuits could follow, given that labor, management and shareholders pursue different objectives and that legal interpretations may diverge.
According to the legal community on Nov. 31, the Korea Shareholders' Movement Headquarters (Shareholders' Movement Headquarters) said in a public statement issued in front of the Gyeonggi Regional Labor Relations Commission in Suwon on Nov. 27, "The special management performance bonus, funded by 10.5% of operating profit at Samsung Electronics' Device Solutions (DS) division, and the Overall Performance Incentive (OPI) system based on 10% of operating profit, effectively constitute a structure that pre-distributes about 12% of pre-tax operating profit." The group added, "This is a wage agreement only in form; in substance, it is a 'disguised illegal dividend' that bypasses the dividend procedures stipulated under the Commercial Act."
The group continued, "Operating profit can only be distributed after corporate tax deductions, calculation of distributable profits, and a resolution by the general shareholders' meeting," warning of legal action by stating, "The performance bonus agreement linked to operating profit is an act that undermines the Commercial Act and constitutional order." If bonus payments based on the labor-management agreement materialize, the Shareholders' Movement Headquarters said it will sequentially pursue four judicial procedures: a lawsuit to confirm invalidity, a request and injunction to halt the unlawful act, a representative damages suit for breach of directors' fiduciary duty, and damages claims against participants in any unlawful strike.
The agreement, which calls for massive bonus payments, has become a flashpoint of conflict among labor, management and shareholders, marking the prelude to a legal dispute. Experts predict that the conflict structure could lead to a so-called "cascade of lawsuits." Disputes over bonus payments could escalate into strikes, or shareholders could push back against the labor-management agreement, triggering both civil and criminal lawsuits. With the interests of management, the union and shareholders sharply at odds, the situation could give rise to criminal complaints over breach of trust and obstruction of business, as well as civil lawsuits.
A labor lawyer who requested anonymity said, "From the perspective that profits available for dividends could shrink, shareholders may view management's decision on the bonus as a breach of trust and file criminal lawsuits." The lawyer added, "If management takes a lukewarm stance, shareholders may also file damages claims demanding compensation for losses linked to the astronomical bonus payments."
Another labor lawyer said, "Injunction suits to halt bonus payments, as well as criminal complaints against management on breach of trust charges, are all possible." The lawyer added, "In the case of large-scale bonuses, shareholders are likely to pursue various lawsuits citing share price declines or erosion of corporate value." The lawyer continued, "In particular, since legal interpretations diverge over whether collective actions such as strikes related to bonuses qualify as legitimate industrial action under the Trade Union Act, judicial disputes could arise going forward." The lawyer added, "If a court rules that such actions cannot be regarded as legitimate industrial action, shareholders could file criminal complaints on charges including obstruction of business."
Some observers suggest that if the conclusion of large-scale bonus agreements spreads from Samsung Electronics to other major conglomerates and extends beyond prime contractors to subcontractors, the scope of legal disputes could widen. As the bonus issue spreads from Samsung Electronics to other large companies and then to subcontractors, lawsuits surrounding it could become more frequent.
A lawyer who requested anonymity said, "In connection with the so-called 'Yellow Envelope Act' currently in force, disputes are looming over whether 'only prime contractors can receive bonuses, or whether subcontractors cannot.'" The lawyer added, "This is a different issue from before, and as the bonus payment controversy spreads to subcontractors, various legal disputes are highly likely to follow."
