On the eve of a general strike, Samsung Electronics labor and management reached a dramatic tentative wage deal, but a shareholder group warned of legal action, calling performance bonuses tied to operating profit "disguised and illegal dividends."
On the morning of the 21st, Min Kyung-kwon, head of the Korea Shareholders' Advocacy Group, held a press conference near the home of Samsung Electronics Chairman Lee Jae-yong and made the claim.
Min said, "The essence of this agreement is a structure that pre-calculates and allocates a certain percentage at the operating profit (pre-tax profit) stage as performance bonuses," adding, "It is disguised illegal dividends that did not go through a shareholders' meeting resolution."
On the night before the general strike, Samsung Electronics labor and management dramatically produced a tentative wage agreement. The core is to establish a special management performance bonus for the semiconductor (DS) institutional sector in addition to the OPI (performance incentive). The funding source for the special management performance bonus will be 10.5% of business performance and the like selected by labor and management by agreement, and it will be paid in stock, not cash. In particular, by deciding not to impose a cap on the payout rate, they opened the way for exceptional rewards based on performance.
Adding 1.5% OPI and 10.5% special management performance bonus results in paying roughly 12% of operating profit as performance bonuses, which, the shareholder group argues, substantially infringes on shareholders' residual property claim rights. They also argued it is void unless it goes through a shareholders' meeting resolution procedure.
Min said the group would pursue legal action. "If performance bonuses linked to operating profit are concluded, we will immediately file for an injunction to suspend the effect and a lawsuit to confirm nullification," Min said, adding, "We will also file a shareholder derivative suit for damages against all directors who voted in favor of this resolution."
Min added, "Starting today, we will recruit Samsung Electronics shareholders by inspecting the shareholder registry and begin the process of consolidating the litigation group," noting, "This is the process to secure the equity requirement necessary to exercise minority shareholder rights."
The tentative agreement prepared by Samsung Electronics labor and management will be finalized if it passes a vote by union members. The Samsung Electronics Union Joint Struggle Headquarters said in guidance to members that it will hold a vote on the tentative agreement from 2 p.m. on the 22nd to 10 a.m. on the 27th.