The Korea Herald


Winners and losers at year-end bonus season

Chip sector expected to receive little to no bonus; automakers, shipbuilders likely to hand out hefty incentives

By Kan Hyeong-woo

Published : Dec. 29, 2023 - 15:53

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Employees at major South Korean firms are set to receive different amounts of year-end bonuses, ranging from nothing at all to 30 percent of their annual salaries, depending on the performance of the industrial sector for 2023.

Workers in Samsung Electronics’ device solutions division, which is in charge of the company’s chip business, are expected to receive no incentives next year, due to the weak performance of the chip sector, according to industry sources Friday.

Over the past several years, the company awarded employees record-high incentives thanks to booming business based on its overall performance incentive program. Bonuses are given out at the beginning of the year based on the previous year’s earnings, and could go as high as 50 percent of an employee’s annual salary.

However, the firm will leave workers empty-handed this year, with a global economic downturn dragging down the chip sector all year. The device solutions division logged an accumulated loss of 12.7 trillion won ($9.9 billion) in the first three quarters of the year.

Despite disappointment within device solutions as workers missed out on the chance to boost their yearly income by about 30 percent, employees of the mobile experience division are reportedly expecting a maximum 50 percent overall performance incentive on the back of strong sales of Samsung’s flagship smartphones this year.

The exact percentage of the incentive for each division will be officially announced in January.

SK hynix, another Korean chipmaker, has not confirmed details about yearly profit sharing incentives, which can go up to 50 percent of one's annual salary. But as the company is expected to post several trillion won in operating losses by the end of the year similarly to Samsung Electronics, hopes of hefty year-end bonuses remain dim.

On the other hand, employees at the country’s two leading carmakers -- Hyundai Motor and Kia, both under Hyundai Motor Group -- are more optimistic after a year marked by upbeat sales, record-high operating profit and incentives. The labor unions and management of Hyundai Motor and Kia reached tentative agreements in September and October, respectively.

According to the agreements, employees of the two automakers were set to receive an incentive equal to 300 percent of their monthly salary plus an additional 8 million won. They also earned another month's wages and a special bonus of 2.5 million won. Auto industry sources estimate the total incentives for an employee to reach up to 50 million won.

Like the auto sector, the country’s shipbuilding industry saw booming business this year. HD Hyundai Heavy Industries, the world’s leading shipbuilder, offered an incentive amounting to 251 percent of monthly salary to employees this week, according to reports. The shipbuilder is projected to log operating profits of 133.2 billion won at the end of the year.

Samsung Heavy Industries turned into the black in its first-quarter earnings this year, and the profits continued to accelerate throughout the year. As the shipbuilder is forecast to log another profit in the fourth quarter, the company is expected to hand out unspecified incentives to employees early next year.

Hanwha Ocean likewise promised an incentive equal to 300 percent of the monthly salary for employees if the company achieves a certain amount in sales this year.