Samsung’s Performance Bonus Due Today, Employees Rejoice

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Samsung’s Overall Performance Incentive (OPI) bonus is due to be paid today, which means many thousands of employees will be getting a special pre-Lunar New Year holiday check. The OPI bonus could be up to 50% of the employee’s annual salary, and those individuals working for the semiconductor business division are expected to receive the highest bonus figures. For Q4 2016, this division posted operating profits of almost 5 trillion won, or $4.25 billion. Today’s OPI bonus payment follows yesterday’s bonus payment, again for the second half of 2016, of 21.55 billion on (approximately $18.5 million) to 122 semiconductor subcontractors. Samsung rewards its subcontractors because it believes that it was only able to post such a strong profit thanks to its partner’s support. In total, almost 12,000 workers will be receiving an OPI bonus, which is the highest number of individuals receiving the award since the incentive scheme was introduced in 2010.

At the beginning of the decade, Samsung introduced the OPI bonus incentive scheme for partners in order to encourage these companies to be the most productive and produce the highest quality of service or product for Samsung. The company also introduced a safety incentive in 2013 designed to “eliminate environmental safety accidents.” For the first year that it was introduced, Samsung paid out 5.06 billion won (approximately $4.3 million) to 46 subcontractors. For the first half of 2016, this figure was up to 15.28 billion won, approximately $13.1 million, to 95 subcontractors.

Interestingly enough, the second half of 2016 was a difficult year for Samsung in the headlines. The Samsung Galaxy Note 7 was released in August, during the third quarter but a little over a month later was subject to a recall and replacement. Following the initial replacement, after a few weeks the new devices were recalled back to the factory to be disposed of and customers were offered a refund. There were two separate battery faults for the Galaxy Note 7, one produced internally and another produced by a Chinese component supplier. Despite this, Samsung is still paying out a record bonus. We have already seen that the Galaxy Note 7 battery problem has not prevented the company from recording impressive profits and it is good to see senior management sharing out the success.