[비즈한국] Samsung Electronics005930, recently riding a bullish trend with its stock price breaking through the 140,000 won mark, has introduced a stock-based compensation option ahead of the upcoming incentive payouts on the 30th. The core of the plan is to offer an additional bonus for choosing shares over cash, provided the recipient agrees to hold the stock for a set period, leaving employees busy calculating whether to opt for cash or bet on the stock.
15% More, 1-Year Lock-up
According to business circles on the 12th, Samsung Electronics announced a "Stock-Based Incentive Plan" to all employees ahead of the 2025 Overall Profit Incentive (OPI) payouts at the end of this month. The key aspect of this reform is that if an employee chooses to receive between 0% and 50% of their bonus in stock and commits to holding it for one year, the company will provide an additional 15% of the chosen amount in stock as an advance bonus.
To put it simply, if an employee entitled to a 20 million won bonus chooses to take half (10 million won) in stock, they would receive 10 million won in cash and 11.5 million won worth of stock (10 million won + 15% advance bonus). The total value of the compensation at the time of payout effectively increases to 21.5 million won.
This means that even if the stock price drops by about 13% after a year, the employee maintains the same asset value as if they had taken the full 20 million won in cash. If the stock price rises, the capital gains are added to the 15% bonus, maximizing returns. In this sense, the 15% advance stock serves as a profit booster in a bull market and a partial buffer in a bear market.
Mandatory Stock Rule for Executives Removed... Is Responsible Management Weakening?
Another notable change in this reform is the abolition of the "mandatory stock receipt" rule that previously applied to executives. Last year, Samsung Electronics mandated that executives receive 50% to 100% of their incentives in company stock based on their rank; however, starting this year, executives are also allowed to choose freely within the 0% to 50% range, just like regular employees.
Industry assessments of this change are divided. Some argue that the intensity of responsible management expected of the leadership has weakened. In particular, with the stock price at a high, the removal of the mandatory holding requirement for executives could dilute the signal of responsible management to the outside world.
On the other hand, some view it as a shift toward a more advanced incentive system, as the criteria are now applied uniformly to all employees to enhance fairness. The analysis suggests that by expanding the stock compensation option to all employees, the company is opting for performance-sharing through voluntary participation. It is expected to act as a practical incentive, creating a structure where the company's growth directly leads to personal asset appreciation regardless of job title.
Industry observers are focused on why Samsung Electronics has chosen to expand stock-based compensation with a 15% bonus. The interpretation is that by tying up employee-held shares for one year, the company is aiming for stock price stability while simultaneously signaling confidence in its future share performance.
However, some argue that a one-year holding period is still short compared to Silicon Valley-style long-term incentives. For this system to become a genuine innovation in compensation, it needs to be supported by transparent sharing of information regarding stock volatility risks and sustained efforts to enhance long-term shareholder value. Consistent operational principles must also be maintained regardless of stock market fluctuations.
Beyond the OPI reform, Samsung Electronics is operating other mechanisms to strengthen responsible management among its staff. A prime example is the "Performance Share Unit (PSU)" system introduced last October. This is a three-year long-term compensation scheme designed to focus management and employees on long-term corporate value; it grants no shares if the stock price growth is below 20%, but doubles the payout if it rises by 100% or more.