The labor-management conflict surrounding performance-based bonuses tied to operating profits at Samsung Electronics and SK Hynix has ultimately escalated into criminal complaints.
The Korea Shareholders Movement Headquarters, a minor shareholder advocacy group, filed a complaint with the National Office of Investigation of the Korean National Police Agency against three chief executive officers of Samsung Electronics and SK Hynix on charges of breach of trust under the Act on the Aggravated Punishment, etc. of Specific Economic Crimes.
Additionally, the group submitted a complaint to the Corruption Investigation Office for High-Ranking Officials against Employment and Labor Minister Kim Young-hoon, who mediated the wage negotiations with the labor unions, on charges of abuse of authority.
The Shareholders Movement Headquarters pointed out, "Performance bonuses linked to corporate profit and loss are not wages in exchange for labor, but rather ex-post distributions of management performance; therefore, they cannot be subject to labor disputes such as strikes under labor law."
Accordingly, the group maintains that deciding on profit distribution requires a proposal by management and approval at a shareholders' meeting, rather than labor-management negotiations.
The group took issue with the agreement reached last May between Samsung Electronics management and labor, in which approximately 12 percent of business performance was allocated as a funding source for performance bonuses in the DS (Device Solutions) division.
They claimed that the labor authorities failed to prevent performance bonus demands that should not be subject to labor disputes, and instead leveraged the prevention of strikes to pressure the company into reaching an agreement.
They also added, "Management inflicted losses on company assets by entering into an agreement to allocate a portion of business performance as bonus funds without reviewing legal countermeasures."
They further emphasized that SK Hynix management also committed breach of trust by introducing a structure that allocates 10 percent of operating profit as bonus funding and abolishing the payment cap to execute massive performance bonuses.
Following this criminal complaint, the Shareholders Movement Headquarters plans to soon pursue civil legal procedures, including a lawsuit to nullify board resolutions and a shareholder derivative suit. Consequently, legal battles surrounding the performance bonus system among labor, management, government, and shareholders are expected to continue.
(Reported by Lee Hyeon-yeong | Video by Kim Na-on | Graphics by Yook Do-hyun | Produced by SBS Digital News)
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