Samsung Electronics offers huge bonuses to semiconductor employees to avoid 18-day strike: All details
Follow UsSamsung has paused the workers’ strike after offering a new pay deal to employees.
Workers will vote on the proposal, which includes cash and stock bonuses.
The update boosted Samsung shares and reduced concerns over chip supply issues.
Samsung workers’ protest in South Korea has taken an unexpected turn, as the union has put the strike on hold after the company offered employees a generous pay deal. Nearly 89,000 workers at Samsung Electronics are set to vote on the proposed agreement. Electronic voting will begin on Friday afternoon, May 22, and continue until May 27. Union leaders believe the agreement is likely to pass, offering relief to the company and easing concerns about potential disruption to the global chip supply chain. The proposed package includes substantial cash bonuses and stock-based rewards for employees in Samsung’s semiconductor division. Investors have already responded positively to the development, pushing Samsung shares to record highs earlier this week after news of the agreement emerged.
SurveyAccording to the union, the voting process for the pay deal in the South Korean chip manufacturing unit was briefly delayed because of heavy online traffic that caused a server overload. Workers are now expected to cast their votes electronically over the next several days.
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For the agreement to pass, more than half of participating members must vote in favour, while at least half of all union members must take part in the process. If the deal fails to secure enough support, negotiations between Samsung and the union will have to begin again.
The agreement was reached on Wednesday after government mediation helped both sides avoid a lengthy strike. The proposed walkout had raised concerns about the impact it could have on South Korea’s economy and the global semiconductor industry, where Samsung remains one of the biggest players.
Following news of the deal, Samsung’s shares jumped 8.5 per cent on Thursday, hitting a record high. The stock briefly touched another peak on Friday before falling back slightly during trading. Under the proposed agreement, all workers in Samsung’s chip division will receive a cash bonus worth 50 per cent of their annual salary. In addition, the company will reserve 10.5 per cent of the division’s operating profit for special stock bonuses.
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Some memory chip workers are expected to receive total bonuses of around $416,000 this year, making it one of the most rewarding compensation packages offered by the company in recent years. The outcome of the vote will now decide whether Samsung can move ahead with a stable labour agreement at a time when global demand for advanced chips continues to grow.
