Samsung Electro-Mechanics shifts bonus formula to '10% of operating profit'

Samsung Electro-Mechanics appears set to follow Samsung Electronics in calculating its bonus pool based on 10 percent of operating profit. The industry is watching closely to see whether the "N percent of operating profit" bonus formula will spread to other Samsung Group affiliates.

According to industry sources Tuesday, Samsung Electro-Mechanics recently held an employee vote on overhauling the calculation method for its Outperformance Incentive, or OPI — one of Samsung Group's signature bonus schemes.

Employees were asked to choose between retaining the existing formula, which allocates 20 percent of Economic Value Added (EVA), and switching to a new approach that draws on 10 percent of operating profit.

The vote ran from July 18 to July 30. Of the 12,886 eligible voters, 9,343 cast ballots — a turnout of 72.5 percent — and 9,068 of them, or 97.1 percent, backed the "10 percent of operating profit" option.

Samsung Electro-Mechanics plans to apply the new formula starting with the OPI payment due in early next year, replacing the previous EVA-based 20 percent calculation.

OPI is paid once a year and can reach up to 50 percent of an employee's annual salary when the business unit exceeds its targets set at the start of the year. Along with the Target Achievement Incentive (TAI), it is one of Samsung's two main performance bonus programs.

Discontent had been building among Samsung Electro-Mechanics employees for some time, with many arguing that the EVA-based OPI formula failed to adequately reflect the company's actual earnings.

In 2023, Samsung Electro-Mechanics posted operating profit of more than 600 billion won ($387 million), yet the OPI payout amounted to just 1 percent of annual salary. The rate remained in the single digits — between 5 and 6 percent — in both 2024 and 2025.

The company's union had demanded that 15 percent of operating profit be set aside for bonuses, but management rejected the proposal.

The labor-management council subsequently agreed to put the two options — 20 percent of EVA or 10 percent of operating profit — to an employee vote, leading to the ballot just concluded.

Earlier this year, Samsung Electronics' DS (semiconductor) division agreed during wage negotiations to shift its OPI pool from the EVA basis to 10 percent of operating profit. Samsung Electro-Mechanics is the first Samsung Group affiliate to formally change its bonus calculation standard to one based on operating profit.