By Kim Yoo-chul
Samsung Electronics will retain the 50 percent ceiling for employee bonuses at the company’s mobile division, despite the division’s continued dismal performance, officials said.
“Employees at Samsung’s mobile division will receive 50 percent of their annual salaries as compensation for their sincere contribution to keeping the division running despite numerous challenges,” a high-ranking Samsung executive told The Korea Times by telephone, Wednesday.
The additional bonus amount, before taxes, will be given to employees of the division this month under the name of overall performance incentive (OPI).
Samsung has recently completed accounting procedures such as economic value added (EVA) for each company division.
Samsung Electronics usually augments its not-that-high salaries with bonuses. For example, the world’s top smartphone producer pays employees at its divisions up to 50 percent of their annual salaries if their division reaps profits exceeding internal targets set early on in the year.
“Last year, performance at Samsung’s handset division wasn’t that strong. But the division fared well despite growing challenges such as the rise of cheap Chinese vendors amid the new market landscape. The mobile division is worthy of being rewarded,” said the executive.
It had been said that Samsung may cut its yearend bonuses to the company’s mobile division because of the low growth rate.
“Still, the smartphone business is our biggest cash cow along with the memory chip business. Samsung will try to motivate workers through proper compensation,” said another company official.
“The decision for maximum bonuses to mobile employees includes the company management’s hopes to proceed on their given mission under new leadership.”
Samsung Electronics named Koh Dong-jin as the president of its smartphone business in last year’s management reshuffle, pushing long-time mobile boss Shin Jong-kyun to a secondary position handling the division’s overall strategy.
Under Koh’s leadership, Samsung invited Korean reporters early Wednesday to an unpacked event for the company’s new flagship product ― Galaxy S7 ― ahead of this year’s Mobile World Congress (MWC) convention to be held in the Spanish city of Barcelona next month.
Along with mobile employees, staff in its memory chip division will also receive maximum bonuses thanks to the unit’s quarterly record profits of 3.66 trillion won during the third quarter of last year.
Sales during July-September also reached a quarterly record of 12.82 trillion won. Samsung Electronics plans to release the results of its fourth quarter performance this week.
Employees at its network business division will receive 20 percent of their annual salaries, while those at the firm’s technology center, digital media research lab and software center will receive 45 percent, according to the company.
Its consumer electronics division, which handles appliances such as refrigerators and washers, will receive 10 percent of their annual salaries.
Those in its TV business will receive 21 percent. Samsung’s TV business was ranked as the world’s top TV brand for the 10th straight year, but weak demand resulted in a drop in TV sales from the previous year.
Workers at Samsung SDI’s battery business division, which Samsung identified as one of its new growth engines, will get a meager 3 percent as the battery business failed to increase its business size.