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Samsung and Union Reach Provisional Deal to Avert Major Strike

Tying large conditional bonuses to profit targets, using treasury shares with lock‑ups to limit cash payouts, the pact now awaits union ratification.

Overview

  • The union and Samsung reached a provisional agreement after 11 hours of talks on Wednesday that suspended a planned 18‑day strike by about 48,000 workers and set a ratification vote starting May 22.
  • The deal allocates 10.5% of operating profit to special bonuses paid largely in treasury shares plus 1.5% in cash and is structured as a 10‑year, profit‑conditioned program with lock‑up periods.
  • Bloomberg calculations and company estimates suggest semiconductor‑division workers could average about 513 million won in special payouts this year while an anonymous union source said a memory worker might receive about 626 million won.
  • Markets rallied on the news with Samsung shares jumping roughly 8–8.5% to record levels and the deal averted company estimates that a strike could have caused losses as high as 100 trillion won and disrupted global chip supply.
  • The agreement has provoked protests from non‑memory divisions and a small group of shareholders has threatened legal action, leaving ratification and governance risks as the next major questions.