Samsung Electronics is experiencing difficulties in its wage negotiations for the year, as significant differences in stance regarding performance pay between the labor and management sides have emerged. The joint negotiation group, which consists of three unions within Samsung Electronics, announced on the 19th that the 2026 wage negotiations had ended without agreement, with the lead negotiator stating that reaching a consensus under the current circumstances seems impossible. To further complicate matters, a request for mediation will be submitted to the Central Labor Relations Commission the following day.

One of the primary issues at the heart of the negotiations is the restructuring of the performance pay determination method, which the union claims is overly complex and lacks transparency. The union's demands include abolishing the performance pay cap to raise the current levels significantly, which they argue are lower than competitors. Samsung currently utilizes 20% of the economic value added (EVA) from post-tax operating profits as a basis for performance pay, with a ceiling of up to 50% of individual salary. This system has led the unions to point out a substantial disparity in performance pay compared to competitors like SK Hynix.

SK Hynix recently eliminated its performance pay cap following an agreement between labor and management, committing to allocate 10% of its operating profit to performance pay. As mediation proceedings begin at the Central Labor Relations Commission, both parties must decide whether to accept the proposed mediation suggestions. If negotiations don't progress, the union may resort to actions following a member vote for strike actions, potentially escalating the conflict further.