Samsung Electronics cuts performance bonus for chip division on slump

[Photo by Yonhap]

Samsung Electronics Co. reduced the size of performance bonuses for its semiconductor division after posting its wort earnings due to a slump of the chip industry.

The world’s largest chipmaker announced on Wednesday its target achievement incentive (TAI) pay, a half-yearly bonus as high as 100 percent of a monthly base salary. Employees are paid the bonus based on business performance at their division. The rate for the Device Solution (DS) division, which handles the memory chip business, has fallen to 25 percent of the base salary per month. This reduction is significant compared with the rate observed in the second half of last year.

While employees in the DS division used to receive their TAI bonuses at the highest rate, which equaled to 100 percent of their monthly base salary, this year’s rate has been lowered due to sluggish earnings. The chip business experienced an operating loss of 4.5 trillion won ($3.45 billion) in the first quarter, the first time in 14 years.

TAI sizes varied across divisions. The Medical Device division will receive 75 percent of its base salary as bonus. The Visual Display (VD) division, which is responsible for the business of smartphones and TVs, the rate is 50 percent.

Other subsidiaries of Samsung Group announced their TAI rates.

Samsung Display Co.’s Small and Medium-sized Display and Large Display divisions, the bonus was set at a rate of 100 percent of a monthly base salary. The Optical Communication Solution division had the highest TAI pay rate among other divisions of Samsung Electro-Mechanics Co. The bonuses for the Component and Package Solution divisions were set at 50 percent and 37.5 percent, respectively.

Divisions at Samsung SDI Co. will receive TAI bonuses at different rates. The Small Battery division will get 100 percent, while the Electronic Materials division will get 62.5 percent of a monthly base salary.