COMP NEWS – Several of South Korea’s top manufacturers and conglomerates are awarding massive bonuses to their employees, while others are
South Korea’s top conglomerates are announcing their plans for employee compensation for 2023 following mixed earnings reports last week.
LG Electronics, which posted another year of record sales, pledged to give out hefty bonuses to employees, while the nation’s top two chipmakers, Samsung Electronics and SK hynix, hit hard by a chip slump last year, seem to be tightening their belts, reducing spending including on employee benefits.
LG Electronics, the crown jewel of the nation’s fourth-largest conglomerate, decided to pay big performance bonuses to its employees beginning this year, as the company achieved its highest sales for three consecutive years, according to industry sources on Monday.
Employees at the Home Appliances and Air Solutions business unit are known to be offered incentives worth a whopping 445 to 665 percent of their basic salary – 1/20 of the annual salary. The Living Solutions department in charge of washing machines is expected to enjoy the highest rate.
The H&A business unit recorded sales of 30.1 trillion won ($22.5 billion) last year, beating its US rival Whirlpool to secure the top spot in the global home appliance market.
Employees at the company’s Vehicle Solutions business unit, in charge of electric vehicles and EV components, will receive a performance bonus worth 455 percent of the basic salary. The unit, which celebrated its 10th anniversary of establishment, witnessed its sales surpass the 10-trillion-won mark for the first time last year.
Not all companies are sharing large bonuses. Samsung Electronics has no plans to pay extra incentives following a year of lower-than-expected profits.
In the meantime, Samsung Electronics, the nation’s largest company in market capitalization and the world’s largest memory chip maker by revenue, has no plans to pay incentives for the chip business unit that suffered a plunge in profits last year.
“This is the first time that the DS (chip business) division has gotten no OPI incentives since the program was launched in 2000,” a Samsung official said on condition of anonymity.
Samsung’s chip business division used to enjoy hefty incentives worth some 50 percent of salaries every year in recent years. It is rare for its employees to receive zero bonuses. Under its OPI reward program, Samsung uses 20 percent of the firm’s excess profits to pay workers up to 50 percent of their salaries every January.
Samsung also runs a target achievement incentive, or TAI, program that offers workers up to 10 percent of their monthly salary as an incentive twice per year.
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