With Samsung Electronics set to see the birth of its first majority single labor union since its founding in 1969, attention is growing on the ongoing 2026 wage and collective bargaining agreement (CBA). Once the majority single union status is verified, it will secure the status of employee representative and gain legal collective bargaining rights, strengthening its negotiating power. If this year's CBA is not wrapped up smoothly, it could plant the seeds of conflict between the future majority union and management, drawing industry attention.
According to the industry on the 2nd, Samsung Electronics' 2026 CBA talks are facing difficulties. The union is demanding a 7% increase in base pay and a performance bonus funded by 20% of total operating profit with no cap. Management, by contrast, insists on a 3% base pay increase and maintaining the current performance bonus scheme. With a large gap between the union's demands and management's proposal, coordination is said to be difficult.
◇ Union: "Abolish the performance bonus cap and change the criteria"
Samsung Electronics currently has a multiple-union system with five unions active. Among them, the larger groups — ▲Samsung Group's supra-enterprise labor union Samsung Electronics chapter (supra-enterprise union) ▲National Samsung Electronics Labor Union ▲Samsung Electronics Companion Union — formed a joint bargaining team in Nov. last year to prepare for the "2026 CBA." Main talks with management have been held every Tuesday since Dec. 16 last year. Management's specific proposal was presented at the most recent seventh main session on Jan. 27.
According to minutes of the main talks, the joint bargaining team opened the CBA by making a total of 18 demands to management: "three key items" and "15 separate items." The core demand is essentially "pay performance bonuses like SK hynix." In Sept. last year, SK hynix, through a labor-management agreement, set the base pay increase at 6% and abolished the cap (1,000% of base salary) on the existing performance bonus, the profit sharing (PS). It pays performance bonuses funded by 10% of annual operating profit, with 80% paid in the year and the remainder split into two payments of 10% each over two years. With SK hynix posting record earnings last year, each employee is expected to receive an average performance bonus of about 130 million won under the agreement.
Samsung Electronics operates an excess profit incentive (OPI) system. It is funded by 20% of economic value added (EVA) and pays up to 50% of annual salary as a performance bonus. The joint bargaining team argues that the calculation of EVA, which funds the OPI, lacks transparency. EVA is the amount obtained by deducting capital costs such as corporate tax, dividends, and investment funds from after-tax operating profit. Since the company does not transparently disclose the components of "capital costs," and the standards are hard to grasp without specialized accounting knowledge, the team argues the performance bonus fund should be set at 20% of operating profit.
In addition, the joint bargaining team is asking for ▲an overhaul of the target achievement incentive (TAI) system ▲unification of CL4 and improvement of the salary cap ▲a new housing stability loan ▲improved long-service awards ▲a new holiday bonus ▲30 shares of treasury stock for labor-management encouragement in 2026 ▲higher welfare points ▲phased abolition of fixed overtime allowances ▲expansion and increase of shift allowances ▲a new reward for mandatory annual leave usage, among others.
◇ Management: "If we pay 10% of operating profit as performance bonuses, payouts will actually fall"
As the Samsung Electronics joint bargaining team pushed for adopting a performance bonus fund based on "20% of operating profit," higher than SK hynix, management expressed reluctance, saying, "We question whether this is practically feasible." It said, "In a structure where we must reliably secure essential investment funds for tax payments and business continuity, a performance compensation scheme based on the concept of EVA is unavoidable when considering the basic purpose of corporate growth and survival." Management also argues that the minimum dividends funding now being paid by Samsung Electronics is significantly higher than SK hynix's "dividends plus performance bonuses." Given fundamental differences in how the two companies fund their performance bonuses, it said it is difficult to simply adopt the same structure.
Management also simulated a scenario in which, like SK hynix, 10% of operating profit is paid as performance bonuses and concluded that OPI payout rates would be lower than now for the DS (semiconductors), MX (smartphones), and VD (TV) divisions. Addressing suspicions of executive interference in setting OPI payout rates, it said, "There have been cases where specific losses were excluded in a way that increases OPI, but we have never adjusted it to cause disadvantages, and it is determined by a fixed formula without executive involvement."
Management therefore argued that it is necessary to maintain the current OPI method based on EVA. However, reflecting the joint bargaining team's views, it said it is reviewing ▲the possibility of additional compensation for excess performance within the scope of the EVA 20% fund ▲improvements to communication methods and transparency to enhance trust in the performance bonus system.
Management also proposed a 3% base pay increase, which is 4 percentage points lower than the joint bargaining team's demand, saying it took into account the "worsening performance of the DX (finished goods) division." It said, "Given the worsening performance and management conditions of each division, it is practically difficult to exceed the 2025 increase rate (3%)." However, since maintaining the existing percentage-based increase may limit the perceived benefit for employees with relatively lower salaries, it said it is also reviewing a plan to adopt a "flat amount increase."
◇ Birth of a "majority single union" imminent
Samsung Electronics formed its first union in 2018, but without a majority union qualified as the employee representative, multiple unions joined forces to negotiate with management, as in the 2026 CBA. That is expected to change next year. As of 1 p.m. that day, the supra-enterprise union had 64,591 members. As of June last year, Samsung Electronics had a total of 129,524 employees (including 599 fixed-term workers), meaning it has numerically achieved a majority union. The supra-enterprise union argues that surpassing 62,500 members constitutes a majority union.
The supra-enterprise union grew from 6,300 members in Aug. last year to 45,000 in three months. It then surpassed 60,000 in another three months, rapidly expanding its ranks. The industry interprets this as reflecting rising internal discontent following SK hynix's change to its performance bonus system.
If the supra-enterprise union is recognized as the employee representative, it becomes the party that can change work rules. It would also secure the right to appoint employee members to the labor-management council and could be involved in changes to ▲layoffs ▲flexible work hours ▲selective work hours ▲and compensatory leave. If the majority union signs a collective agreement with management, the contents would have "general binding force."