Samsung workers approve pay deal, shares surge

Unionised workers at Samsung Electronics 005930.KS have approved a highly contentious bonus pay deal - one that averts a massive 18-day strike but also exacerbates deep disparities in fortunes among workers at the tech conglomerate.

Two unions for the world's largest memory chip maker said on Wednesday that 74% of the 62,616 workers who cast their votes had backed the deal.

Shares in Samsung surged 6%, also helped by investor frenzy over the AI boom that has driven chip sector shares higher.

The government-mediated agreement, which came after a bitter five-month dispute, has led to wide relief across South Korea as Samsung accounts for roughly a quarter of the country's exports.

Forged under much pressure to narrow the gap with sky-high bonuses at rival chipmaker SK Hynix 000660.KS, the deal mainly benefits workers in the company's memory chip division, which has seen profits soar due to the colossal investments globally in AI. Some of those workers are set to receive bonuses of around $416,000 this year.

Workers in Samsung's other chip units will receive less but still substantial bonuses, while employees in its consumer electronics divisions are set to receive very little by comparison.

"The atmosphere is pretty gloomy and many of us lost motivation," said one chip foundry worker in Pyeongtaek, declining to be identified.

"It really is an ironic situation — being depressed despite receiving more money."

Under the agreement, all chip workers will receive a regular cash bonus equal to 50% of their annual salary. Samsung will also set aside 10.5% of its chip division's operating profit for special bonuses, which will be paid in stock. A third of the stocks will be tradable immediately, a third after one year and the remainder after two years.

Payouts are conditional on Samsung meeting profit milestones. The company must achieve more than 200 trillion won in annual operating profit from 2026 to 2028, and 100 trillion won annually from 2029 to 2035.

This year, Samsung's annual profit is expected to hit 300 trillion won ($200 billion), its highest ever and shattering its previous record of 58.9 trillion won set in 2018.

($1 = 1,501.7400 won)

-Hyunjoo Jin/Reuters