Samsung SDS forms first-ever union as bonus dispute draws 3,500 members

A dispute over performance bonuses at Samsung SDS has led to the formation of the company's first-ever labor union.

Samsung SDS is pushing to overhaul its bonus system, shifting away from cash incentives toward compensation in company shares. The move has drawn sharp backlash from employees, and the newly launched union quickly attracted more than 3,500 members.

With a vote on the proposed overhaul still pending, internal tensions are running high and the fallout is expected to continue.

According to industry sources, the Samsung SDS chapter of a cross-company union was established and launched Monday, with about 3,500 employees having joined as of 9 a.m. Tuesday.

On Monday, the Samsung SDS chapter sent a formal notice addressed to CEO Lee Jun-hee and People Team head Kim Sang-yong, stating that the chapter had been established in accordance with union bylaws and calling for collective bargaining at the earliest opportunity. The union was set up as a chapter of an existing cross-company union, allowing it to launch without filing a separate establishment report.

The company's first union emerged amid growing internal opposition to Samsung SDS's push to restructure its bonus system and hold a vote on the changes.

Samsung SDS is conducting a vote on a proposed overhaul that would abolish the cash performance incentive (PI) system and replace it with company shares equivalent to 20 percent of annual salary. The voting deadline, originally set for June 29, was extended to midnight Tuesday.

Employees have pushed back, saying the company has not provided adequate explanation or gathered sufficient input before proceeding with the changes.

Employees are reported to be objecting to two specific elements of the proposal: tying the bonus calculation to the share price and other metrics, and excluding the existing performance incentive from severance pay calculations. They argue the changes could lead to bonus leveling, reduced severance payouts and difficulty converting shares into cash.

The union plans to secure more than 5,500 members — a majority of Samsung SDS's roughly 11,000 employees — to qualify for majority union status and pursue collective bargaining.

Union members are encouraging colleagues who have already voted on the bonus overhaul to reset their votes. They are also setting up a channel for members to exchange views.

Kwon O-gyeong, head of the Samsung SDS union chapter, said the process was hard to accept. "It was difficult to understand how a personnel system overhaul was being pushed through unilaterally, without sufficient explanation," Kwon said. "We wanted a transparent and fair performance evaluation process, but the company has badly shaken employees' trust."

The company said it has held employee briefings and conducted a voting process in connection with the bonus system overhaul.