Samsung Electronics minority shareholders are submitting a joint letter to the National Pension Service of Korea (NPS) in an attempt to block a performance bonus scheme that amounts to 40 trillion won. The minority shareholder platform ACT announced on the 16th that it plans to formally submit the letter to the NPS Fund Management Headquarters on the 20th. The NPS currently holds 7.9% of Samsung Electronics' shares. ACT emphasizes that as a major shareholder of Samsung Electronics and the institution responsible for managing the national pension fund, the NPS has an obligation to prevent excessive loss of profits that should belong to shareholders and to ensure that corporate profits are reasonably returned to shareholders.
The joint letter primarily targets the salary and performance bonus scheme recently reached between Samsung Electronics management and the labor union. ACT argues that the agreement was finalized and implemented without shareholder approval, raising procedural and profit-sharing issues. ACT stated, "The agreement introduces a special performance bonus system for the semiconductor business unit, which can be distributed at a maximum of 10.5% of operating profit over the next 10 years, with no upper limit. Combined with existing incentive mechanisms, the total distribution ratio will reach approximately 12% of operating profit." ACT further pointed out, "Based on this year's performance, the related bonuses could reach a maximum of 40 trillion won annually, and the cumulative amount over 10 years could even reach hundreds of trillions of won, all without shareholder approval." ACT noted that Samsung Electronics' stock price has recently plummeted, with shareholders bearing the entire risk of the stock price decline, while employee performance bonuses are linked to operating profit and are not affected by stock price fluctuations. This asymmetrical structure is rapidly becoming a focus of shareholder attention.
