Following Samsung Electronics, the electronic affiliates are also expected to set the 'Excess Profit Performance Incentive (OPI)' payment rate in the early single digits due to the impact of economic slowdown.
According to the industry on the 22nd, Samsung Electro-Mechanics announced that the OPI payment rate was confirmed at 5% of annual salary across all business divisions. The payment date is set for the 24th.
OPI pays up to 50% of an individual's annual salary, restricted to 20% of excess profits when the performance of the affiliated business division exceeds the goals set at the beginning of the year, and it is a representative performance incentive system of Samsung along with the Target Achievement Incentive (TAI).
In 2022, Samsung Electro-Mechanics recorded an operating profit of 1.1828 trillion won and issued an OPI of 18% early the next year. However, in 2023, it reported an operating profit of 639.4 billion won and set the OPI at 1%. This year's OPI has slightly increased from the previous year's operating profit forecast of around 700 billion won, but due to the slowdown in demand from Chonbang and other factors, the payment rate remained in the single digits.
Last year, affected by a temporary demand stagnation known as the 'Chasm' in electric vehicles, Samsung SDI announced that the OPI forecast payment rate would be 0% except for the electronics materials division (3-5%). The final confirmed payment rate is expected to be individually announced on the 23rd.
Earlier, Samsung SDI recorded an operating profit of 1.633 trillion won in 2023, with the battery division, electronics materials, and headquarters (support organization) receiving OPIs of 32%, 18%, and 28%, respectively, at the beginning of 2024.
Earlier, Samsung Electronics confirmed the OPI payment rate first on the 17th. The device solution (DS) sector, which received an 'empty envelope' last year, had most of its divisions, including memory, system LSI, and foundry business, set at 14%.
In the device experience (DX) sector, the OPI payment rate of the mobile experience (MX) division, which played a pivotal role in performance due to strong Galaxy S24 series sales, was set at 44%. The previous year's payment rate was 50%. The video display (VD) division, which is responsible for the TV business, was set at 27%. The OPI payment rates for the poorly performing home appliances (DA), medical devices, and network divisions are at 9%. Samsung Display confirmed the OPI payment rate at 40% for both the small and large divisions.