Should Shareholders Bear the Losses While Unions Take Only the Profits?

◆ Demanding 45 Trillion Won in Performance Bonuses… Mortgaging Samsung’s Future

Controversy is growing over the Samsung Electronics labor union’s demand for performance bonuses and its warning of a general strike. The union is calling for the removal of the bonus cap and for a fixed percentage of operating profit to be formally designated as the source of performance bonuses. On the surface, this may look like a demand for compensation tied to corporate performance. But this issue is not simply about wage negotiations or labor-management conflict. It concerns the legitimacy of a strike, shareholders’ property rights, the company’s capacity for future investment, and even the competitiveness of Korea’s semiconductor industry.

What must first be made clear is that employees’ contribution to performance should be respected. However, performance bonuses are not a fixed entitlement that must be paid as a matter of course like wages. The profits a company generates are the result of a combination of management performance, market conditions, the cost of capital, investment decisions, shareholder burdens, and future risks. In that sense, demanding that a fixed percentage of operating profit be allocated to performance bonuses is fundamentally different from an ordinary demand for higher wages.

This goes beyond improving working conditions and is closer to a demand to alter the very structure of how corporate profits are distributed. The right of labor unions to collective action should be respected, but when that right is exercised in a way that halts core production facilities and disrupts global supply chains, its legitimacy requires strict scrutiny. In particular, given that the legal nature of performance bonuses is closer to an ex post distribution of management results than to pure wages, threatening a strike at semiconductor plants on that basis is not very persuasive.

The issue of shareholders’ property rights also cannot be overlooked. The owners of a corporation are its shareholders. Shareholders invest capital in the company and directly bear losses resulting from management failure or market deterioration. If the company posts losses or the stock price falls, shareholders suffer financial harm. Workers, by contrast, continue to receive their agreed wages and employment protection even when company performance worsens. If strong profits mean that earnings must be distributed to employees first, then wages should logically be returned when losses occur—but that is something the union would never agree to.

Samsung Electronics is a leading “national stock” held by millions of individual investors. For them, Samsung Electronics’ profits are not just accounting figures, but the foundation of retirement funds, household assets, and long-term investment. Excessive performance bonus payments can reduce the capacity for dividends, damage corporate value, and infringe on shareholders’ property rights. Corporate profits must be distributed in a balanced manner not only for employee compensation, but also for shareholder returns, research and development, capital investment, debt management, crisis response, and the maintenance of the cooperative ecosystem.

Even more important is future investment. The semiconductor industry is not one that ends with a single year’s profit. It is a capital-intensive and technology-driven industry that can survive only through continuous, massive investment in research and development and facilities. If current profits are excessively distributed as performance bonuses, employees may receive large rewards in the short term. But that much fewer resources will remain for future technological competition, process conversion, facility expansion, and talent acquisition. In the semiconductor industry, once a company falls behind, recovery is difficult. If customer trust is lost and the technology gap widens, the damage lasts for a long time.

Performance bonuses can continue only when a company survives and grows. Demands for bonuses that undermine a company’s investment capacity ultimately weaken workers’ future jobs and wage base as well. A model in which the current generation takes too large a share of today’s profits may become a choice that deprives future generations of opportunity. A company is not a distribution mechanism, but a productive organization that must continue to invest and innovate.

The method of striking must not cross the line either. Pressuring employees who refuse to join a strike or using a business leader’s private space as a stage for protest goes beyond the bounds of legitimate labor-management negotiation. Labor rights must be protected, but they must not be exercised in ways that infringe on co-workers’ freedom of choice, shareholders’ property rights, or a company’s normal business operations. In particular, treating disruptions to semiconductor production as a source of bargaining power is hard to view as the conduct of a responsible economic actor.

This controversy over the Samsung Electronics union’s demand for performance bonuses raises an important question for our society. The moment a demand for bonuses takes the company’s future hostage, the damage ultimately falls on workers, shareholders, suppliers, and the national economy as a whole. Samsung Electronics management and labor must think first not only about how to divide current profits, but about how to protect the company’s future.

Gwang yong Go, Policy Director, Center for Free Enterprise (CFE)

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Original title: 주주는 손실 떠안고, 노조는 이익만 나누자는 것인가

Author: Gwang yong Go

Date: 2026-04-28

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=28861