The over-performance incentive (OPI) for the device solution (DS) institutional sector of Samsung Electronics has been set at 12-16% this year.
According to industry sources on the 27th, Samsung Electronics announced the expected payment rates for OPI by business division on that day. The expected payment rate for the DS institutional sector's OPI is 12-16%, which is an increase from last year's rate of 0%, but still remains below normal levels.
OPI is paid up to 50% of an individual's salary within a limit of 20% of the excess profit when the performance of the affiliated business division exceeds the goals set early in the year. It is the representative performance incentive system of Samsung Electronics, along with the 'target achievement incentive' (TAI), which pays a maximum of 100% of the monthly base salary in both the first and second halves of the year.
Employees in the semiconductor institutional sector of Samsung Electronics have received the highest OPI and TAI among the institutional sectors almost every year since the performance incentive system was established. Until two years ago, the OPI for DS employees reached 50% of their salaries, but last year, due to a severe downturn in the semiconductor market, the OPI they received early this year shrank to 0%, resulting in a loss of 14.87 trillion won.
This year, the semiconductor market has improved, and the performance of the DS institutional sector has also improved. This year, Samsung Electronics' DS institutional sector recorded sales of about 109 trillion won and operating profit of about 16 trillion won, and particularly, the memory business division is reported to generate operating profits around 20 trillion won, according to securities analysts.
The expected payment rates for OPI in other business divisions outside the DS institutional sector generally decreased compared to last year's rates. Due to strong sales of the Galaxy S24 series, the mobile experience (MX) institutional sector, which acted as a performance support, is said to have an expected payment rate of 40-44%. Last year's payment rate was 50%.
The video display (VD) institutional sector, which is responsible for the TV business, has also been set at 22-27%, lower than last year's rate of 43%. The home appliances (DA) institutional sector, which had poor performance, along with the network and medical equipment institutional sectors, reportedly remained at a level of 7-9%. Last year's OPI payment rate for these three institutional sectors was all 12%.
The expected payment rate for OPI of Samsung Display, which performed well this year, has been announced to be around 36-40%. Samsung Electro-Mechanics has been set at 4-5%. Samsung Electronics is currently calculating the exact scale of OPI payments and plans to make a final announcement at the payment point in January next year.
In the second half of the year, where TAI is to be paid by the end of this month, there was a disparity between the memory business division and other business divisions as well. TAI is a system that pays up to 100% of the monthly base salary based on performance every year in the first and second halves, combining evaluations of the affiliated institutional sector and business division. The memory business division received 200%, while the system LSI and foundry institutional sectors received 25%, and the semiconductor research institute and AI center received 37.5%. Additionally, Samsung Electronics paid a crisis recovery incentive of 2 million won to all institutional sectors in celebration of the 50th anniversary of semiconductors.