It was confirmed on the 24th that the government is reviewing a plan to require corporations to go through the board of directors and the general meeting of shareholders when determining the size of management performance bonuses. As demands to "allocate a certain percentage of operating profit as performance bonuses" have spread across the business community, prompted by the conflict over performance bonuses between labor and management at Samsung Electronics, the intent is to apply the brakes on excessive distribution through an internal control mechanism that includes shareholder participation.
According to the government, the Ministry of Trade, Industry and Resources is examining a reform plan in this direction. Because performance bonuses without the nature of wages are unrelated to working conditions, they cannot be the subject of labor disputes, it said.
The Ministry of Trade and Industry (MOTI) is also considering amending the Commercial Act or the Financial Investment Services and Capital Markets Act, but since parliamentary procedures take time, it plans to first consult with relevant ministries on parts that can be addressed by enforcement decrees.
Behind MOTI's review of institutional improvements are the performance bonuses at Samsung Electronics and SK hynix, which are enjoying an all-time boom. This has prompted labor groups in other sectors, such as autos and shipbuilding, to demand that a certain percentage of operating profit be paid as performance bonuses.
The government views the current structure—where shareholder voices are absent in the process of dividing operating profit—as unreasonable. The plan is to establish a compensation framework for shareholders who bear risk and to handle wasteful labor-management conflicts within the system.
Kim Jung-kwan, Minister of MOTI, said at a briefing with the ministry press corps on the 22nd, "Operating profit involves not only management and unions but also investors who came in prepared for losses," and added, "Since workers have a basic guarantee in the form of salaries, compensation for investors who shoulder risk should be guaranteed differently."
Kim Yong-beom, Blue House policy chief, also said at the Kwanhun Forum that day, "Originally, labor and management base negotiations on wages and then bargain over other conditions, but now the other part (performance bonuses) is larger," adding, "This is an unprecedented case in the world."
He added, "Whether performance bonuses can be the subject of labor disputes is a matter that requires social discussion," and said, "We need to have discussions and create new rules."