The employees of the South Korean chip giant Samsung Electronics begin to vote on Friday on an agreement providing for an annual bonus of 290,000 euros on average for many employees, on the back of super profits related to AI, fueling the concerns of shareholders and the demands of other companies.
Samsung Electronics and its trade union confederation reached this agreement on Wednesday after last-minute negotiations, thus avoiding an 18-day strike that was due to start on Thursday.
The conflict occurred against the backdrop of the boom in artificial intelligence (AI), which boosted Samsung’s activity in memory chips: the company’s operating profit in the first quarter increased by approximately 750% over a year, while its market capitalization exceeded 1,000 billion dollars at the beginning of May.
The agreement is subject to an electronic vote of the unionized employees from Friday, until May 27, the company and the lawyer of the union organization said.
Approximately 70,000 employees can participate. The agreement will be “automatically ratified” if more than half of the voters present it and if a majority of the voters approve it, according to the lawyer.
The agreement establishes a new bonus regime for employees of the semiconductor division, equivalent to 10.5% of the operating profit of the department and paid in shares, combined with an additional 1.5% in cash.
Some 78,000 employees (out of 125,000 in total in the country) should receive an average of 509 million won (290,000 euros) this year, a company official confirmed on Thursday, based on an annual operating profit expected by the market to be 331,000 billion won.
This bonus scheme, planned for 10 years, is conditional on the ambitious annual performance objectives.
Preserve the talents
The prospect of a strike had raised concerns about its potential economic impact: Samsung Electronics generates 12.5% of South Korea’s GDP and memory chips represent 35% of the country’s exports.
Attention is now focused on the consequences of this unprecedented agreement, while the redistribution of man generated by IA fever is the subject of a growing debate in South Korea, as in the United States.
For analysts, the important bonuses could certainly prevent the best South Korean talents in the sector from leaving to work for foreign competitors, while Americans like Tesla invest more in chips.
According to the Samsung Electronics union, the employees of SK Hynix, another South Korean chip champion, have already received bonuses three times higher than those paid at Samsung last year.
“South Korea represents approximately 80% (of the global production) of memory chips,” says Kim Dae-jong, professor of commerce at Sejong University.
“But the increase in bonus demands could be at the expense of future investments, because funds that would otherwise be devoted to research and development or to shareholder dividends would be redirected towards remuneration”, he warns.
Redistribution
The union arm at Samsung is also fueling similar demands on the part of unions across the country in various sectors.
The movement extends to biotechnologies, the automobile, IT and shipbuilding. The syndicates of Samsung Biologics and the Hyundai Motor Group claim in particular that a portion of the accrued profits be allocated to employee premiums.
In Samsung’s own case, the agreement entrenches the differences between the employees of the chips department, who will benefit from the new premiums… and those of the other sections of the group (screens, telephones, electronics) whose operating benefits are stagnant or declining. De quoi aviver des tensions interne.
Finally, a threat looms over the agreement concluded Wednesday: a group of individual shareholders opposes it, judging the provisions to be illegal because of the green light of their general assembly and saying they are ready to take legal action to block it.
The progressive South Korean president Lee Jae-mung, known for his positions in favor of workers, has shown himself to be extremely cautious in the case of Samsung. The government had threatened to initiate “emergency arbitration” to suspend a possible strike.
On May 12, the secretary of the presidency Kim Yong-beom had mentioned the need to think about sharing the manne of the IA era via a “national dividend” that could finance a basic income or retirement pensions… before being reprimanded by the government and moderating its position.
Source: Lequotidien
