A shareholders' group warned of legal action over the special performance bonus payment plan agreed to by labor and management at Samsung Electronics, saying it is a matter that cannot be decided without a shareholders' meeting resolution. The group argued that because the bonus fund effectively constitutes a distribution of profits, any payment without shareholder approval would be invalid.
The shareholders' group "Korea Shareholder Activism Headquarters" held a press conference on the 22nd in front of the Supreme Court in Seocho-gu, Seoul, and said, "The decision on special performance bonuses for Samsung Electronics executives and employees falls within the authority of shareholders," adding, "If it does not go through a shareholders' meeting, we will file for an injunction to suspend its effect and a lawsuit seeking confirmation of nullification."
The Shareholder Activism Headquarters argued that the bonus rules included in the labor-management agreement at Samsung Electronics are not subject to labor-management agreement under the Commercial Act.
Earlier, labor and management at Samsung Electronics, through a tentative agreement, decided to pay bonuses divided into OPI (performance incentives) and special management performance bonuses for the semiconductor (DS) institutional sector. The special management performance bonus will be funded by 10.5% of the business performance selected by labor and management, and there will be no cap on the payout rate.
The Shareholder Activism Headquarters argued, "Under Supreme Court precedents, performance incentives in this form do not fall under 'wages and other working conditions' that labor and management can agree upon."
It added, "If the union and management persuade each shareholder and obtain approval for profit distribution through a shareholders' meeting resolution, the defect can be cured," and said, "In that case, there would be no need to proceed with a lawsuit to invalidate the agreement."
The group also held a rally the previous day near the home of Samsung Electronics Chairman Lee Jae-yong and said it would push for an injunction to suspend the effect of the labor-management agreement and lawsuits seeking confirmation of nullification.