Samsung strike called off: How to split the 600 million KRW bonus? 10.5% performance, 10-year stock, Korean stocks soared 7%, SK Hynix jumped 11%

South Korea's Minister of Employment and Labor, Kim Yong-trun, made the decision less than an hour before the strike began. On the night of May 20, Samsung Electronics and the union signed a preliminary agreement on the 2026 performance bonus, with approximately 78k DS department employees potentially receiving up to 600 million Korean won; the Seoul stock market opened the next day with the Kospi soaring over 7%.
(Background summary: Samsung's 48k workers' strike was "called off at the last minute"! The union announced a delay of the May 21 strike action, with a Saturday vote on the preliminary agreement)
(Additional background: Exclusive look at SK Hynix "The World I First Saw": KBS uncovers HBM memory secret production line, employees smiling brightly)

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• Kim Yong-trun negotiated the agreement within 1 hour
• How is the 600 million KRW bonus divided? 10.5% performance, 10 years of stock
• Kospi jumps 7%, Samsung and SK Hynix surge simultaneously
• JPMorgan warns: If the strike happens, Samsung could lose $20 billion

Samsung Electronics' strike action was called off early this morning (21). The union had planned a full strike from May 21 to June 7, lasting 18 days and involving about 45,000 to 50k employees. Just before the deadline, a preliminary agreement on the 2026 performance bonus was reached, and the South Korean stock market responded with a 7% surge at Kospi's opening.

Negotiated the agreement within 1 hour

The key to this last-minute resolution was the personal intervention of South Korea's Minister of Employment and Labor, Kim Yong-trun. According to Yonhap News Agency, both sides signed the "Preliminary Agreement on the 2026 Performance Bonus" late on May 20, just under an hour before Samsung Electronics' national union (NSEU) announced the strike.

The union's original demands were quite firm: cancel the current 50% cap on performance bonuses and allocate 15% of annual operating profit to the bonus pool. Samsung initially refused to budge, and negotiations stalled for several days.

The final agreement settled on allocating 10.5%, with the union making substantial concessions, but in return, a new "Special Management Performance Bonus" system was established, providing DS (Device Solutions) department employees with a clearer profit-sharing basis when performance is good.

Although the agreement has been preliminarily signed, it still requires approval through a union member vote to become official. According to the schedule, NSEU members will vote on the temporary salary agreement from 2 PM on May 22 to 10 AM on May 27. Publicly, the likelihood of approval is considered high, but if the vote results in a reversal, the risk of a strike remains.

How is the 600 million KRW bonus divided? 10.5% performance, 10 years of stock

The core structure of this agreement involves the creation of a "Special Management Performance Bonus" in the DS department, with a allocation rate of 10.5% of that department's performance. The distribution logic is two-tiered: 40% goes to all DS employees, and the remaining 60% is distributed according to individual performance in each business unit; if a business unit incurs a loss that year, the payout is temporarily suspended.

Samsung's estimated operating profit for 2026 is 300 trillion KRW. Based on this, the memory chip business group within DS, with about 28k employees, could theoretically receive up to 600 million KRW per person (about NT$14 million).

The entire DS department has about 78k employees, including roughly 30k administrative staff who are also covered, but the distribution ratios and conditions differ.

It is important to note that this bonus is not paid in cash all at once but is distributed in stock over approximately 10 years. The design aims to retain core talent and align employee interests with the company's long-term stock price, but for employees in urgent need of cash, this arrangement remains controversial and could be a continued pressure point for the union.

Kospi surges 7%, Samsung and SK Hynix surge together

Following the news, the reaction in the Seoul stock market was almost immediate. On May 21, the South Korean composite index Kospi opened with a gain of 277.41 points (+3.84%), then surged past 7%, marking the largest single-day increase recently.

Samsung Electronics' stock price also approached 7% gains, finally pricing in the uncertainty caused by the prolonged strike threat. SK Hynix rose even more, breaking 11%. The crisis appears to be alleviated, and the market is readjusting the entire memory supply chain's stability, benefiting SK Hynix as well.

JPMorgan warns: If the strike occurs, Samsung could lose $20 billion

The reason why foreign investors are so nervous about this labor negotiation is the potential destructive power estimated to be alarming. JPMorgan assessed during the strike that if Samsung employees fully cease work, the company's operating profit could potentially drop between $14 billion and $20.79 billion, roughly NT$430 billion to NT$640 billion.

From a supply perspective, Samsung's factories currently account for about 36% of global DRAM shipments. The NSEU union members number about 45,000 to 50k, spanning multiple production lines including memory, logic chips, and packaging. If the strike proceeds as planned, market research estimates that global DRAM supply could instantly shrink by 3% to 4%, and no manufacturer could quickly fill this gap in the short term.

The union's original demand was a 15% bonus allocation rate, but the final agreement settled at 10.5%, representing a concession. However, even this 10.5% figure, which is 30% lower than 15%, still sets a new red line for Samsung's financial discipline: if performance falls short of expectations, this framework could become the starting point for future negotiations.