Seoul, South Korea – As the highly anticipated annual performance bonus season arrives in South Korea, employees of various companies are experiencing a wide range of outcomes, largely influenced by their respective industries and overall company performance.
While battery companies struggling with a downturn in business have found themselves receiving "empty envelopes," semiconductor firms, particularly SK hynix, which has benefited from the surge in high-bandwidth memory (HBM) demand, are set to receive a whopping 1,500% performance bonus.
SK hynix achieves record-breaking sales and operating profit
SK hynix reported record-breaking sales and operating profit for both the fourth quarter and the full year of 2024, driven by the strong demand for AI memory chips. The company's leadership in HBM technology and its focus on profitability have contributed to its impressive performance.
For its outstanding achievements, SK hynix will be awarding employees a performance bonus equivalent to 1,500% of their base salary, the highest in the company's history. This means an employee earning 100 million won will receive a bonus of 75 million won.
However, despite this record-breaking bonus, some SK hynix employees have expressed dissatisfaction, claiming that the amount falls short of their expectations.
Samsung Electronics and LG Electronics
Samsung Electronics has set the performance bonus for its Device Solutions (DS) division at 14%. The company's performance was impacted by weak demand for its mainstay DRAM and NAND flash memory chips due to a slowdown in global IT demand.
The Mobile Experience (MX) business division, which has benefited from the strong sales of the Galaxy S24 series, will receive a 44% performance bonus. The Visual Display (VD) division, responsible for TV businesses, will receive a 27% bonus. The Digital Appliances (DA), Medical Devices, and Networks divisions, which experienced weaker performance, will receive a 9% bonus.
LG Electronics, which also achieved record-high sales last year, will award its Home Appliance & Air Solution (H&A) business division employees a performance bonus of up to 470% of their base salary. The Vehicle Component Solutions (VS) division, which has been a key driver of the company's growth, will receive the highest bonus at 510%.
Battery and petrochemical industries
Battery companies, which have been facing challenges due to the electric vehicle (EV) market slowdown, have seen a significant reduction in their performance bonuses. LG Energy Solution will pay a performance bonus equivalent to 50% of monthly base salary, a far cry from the 900% bonus paid in 2023. Samsung SDI has set the performance bonus for most of its divisions at 0%.
The petrochemical industry, which has been impacted by falling oil prices, is also expected to offer lower performance bonuses. GS Caltex has already announced a 12.5% performance bonus for all employees, down from 50% in 2023. SK Innovation, S-Oil, and HD Hyundai Oilbank are yet to finalize their bonus decisions.
Industry experts predict that many companies will face difficult decisions regarding performance bonuses due to the challenging business environment.
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