(Jan 17): Samsung Electronics Co has decided to pay part of executives’ bonuses in stock rather than cash for the first time, linking pay to share performance at a time the company is struggling with chipmaking.

The company will pay a portion of the annual bonus in shares to executives starting from January next year, according to an internal posting confirmed by the company. The stock portion of the bonus — previously all cash — varies from 50% to 100%, increasing in proportion to seniority. Company officials will then be barred from selling those shares for one to two years, again depending on their rank. 

Samsung is overhauling compensation for executives at a time it’s ceding market share to rivals. South Korea’s largest company lost more than a third of its value in 2024 after failing to close the gap on SK Hynix Inc in the contest to sell advanced memory for Nvidia Corp's artificial intelligence (AI) accelerators.

The company is now directly linking executive compensation to market levels. For example, if Samsung’s share price slides 10%, executives could be rewarded only 90% of their alloted shares. 

Known also as the overall performance incentive, the executive bonus was one of the key changes that Samsung’s largest labour union pushed for, before carrying out its first-ever strike last year.

Samsung is considering extending the new policy to non-executive employees from 2026, though it would be voluntary and their share awards wouldn’t be tied to market performance. 

Uploaded by Tham Yek Lee