Minor shareholders of Samsung Electronics will deliver a shareholder letter to the National Pension Service to put the brakes on the "40 trillion won performance bonus."
Act, a platform for minor shareholders, said on the 16th that it will collect the views of Samsung Electronics' minor shareholders and deliver a shareholder letter to the Fund Management Headquarters of the National Pension Service (NPS). The National Pension Service is a shareholder holding 7.9% equity in Samsung Electronics.
Act said it will gather additional signatures from minor shareholders through the 19th and formally submit the letter on the 20th. So far, 424 shareholders holding 207,724 shares have signed the letter.
The letter raises concerns that the "2026 wage agreement and provisional agreement on performance bonuses" concluded between labor and management at Samsung Electronics will be finalized and implemented without a general meeting of shareholders' approval process.
Act said, "The agreement creates a special management performance bonus that, for the semiconductor division only, pays 10.5% of business performance for 10 years with no cap; combined with existing incentives, the pool amounts to about 12% of business performance," adding, "In that case, up to 40 trillion won a year based on this year's results, and hundreds of trillions of won over 10 years, could flow out without general meeting approval."
Act said, "As a major shareholder of Samsung Electronics and a trustee responsible for the public's retirement income, the National Pension Service has a grave duty to prevent excessive leakage of operating profit, which belongs to shareholders, and to ensure it is returned to shareholders," adding, "If the National Pension Service stands by without fulfilling its fiduciary duty despite concerns over massive outflows of national wealth, 6 million minor shareholders of Samsung Electronics cannot help but sternly point out the dereliction of duty by the National Pension Service."
In particular, citing the recent sharp decline in Samsung Electronics' share price, Act noted, "When the share price falls, the loss falls squarely on shareholders, but employees receive performance bonuses linked to operating profit regardless of share price fluctuations."
It added, "Among shareholders, questions are rapidly spreading about the risk asymmetry in which shareholders bear the risk while employees share the gains without risk."
Regarding the government's recent move to mandate board approval for performance bonus payments, it argued, "Final approval should be obtained at the general meeting of shareholders, not by the board of directors."
Act said, "Even the ceiling on directors' compensation, which amounts to hundreds of billions of won, requires approval at the general meeting, so executing tens of trillions of won in performance bonuses by board decision alone runs counter to the intent of the Commercial Act," emphasizing, "Putting tens of trillions of won in performance bonuses on the judgment table of the general meeting is the will of 6 million shareholders."
Act CEO Lee Sang-mok said, "An enormous distribution of profits that pays tens of trillions of won every year steadily for 10 years should, of course, undergo strict approval by the real owners who fully bear the risk, that is, shareholders," adding, "Compensation for employees' performance should also be decided squarely on the transparent and lawful judgment table of the general meeting of shareholders, which asks the common sense of the capital market."
Meanwhile, Act said it received 99.7% approval in a vote on an agenda item to convene an extraordinary general meeting of shareholders conducted through its platform recently, and has begun the formal convening process. It said it plans to send mailers encouraging shareholders with large equity holdings to participate in the extraordinary meeting around the end of this month, when the shareholder register as of the end of the second quarter is secured.