[Edaily Reporter Shin Yeong-bin ] Samsung SDS (SAMSUNG SDS CO., LTD.(018260)) is pushing ahead with a restructuring of its compensation system, shifting from a cash-based performance bonus system to one that awards company stock. Following a Supreme Court ruling that recognized the wage-like nature of SamsungElectronics’ performance bonuses, discussions on restructuring performance bonus systems are spreading across Samsung affiliates.

According to industry sources on the 26th, Samsung SDS has recently been conducting a vote among all employees on whether to approve the proposed restructuring of its performance-based compensation system. The vote is scheduled to close on the 29th.

The reform plan involves replacing the existing cash-based performance bonus system—which includes the Target Achievement Incentive (TAI) and the Excess Profit Incentive (OPI)—with an annual performance bonus paid in the form of company stock. It is reported that the calculation of the performance bonus will reflect the year-over-year growth rate of operating profit, the stock price appreciation rate, and performance relative to the IT services sector index.

This restructuring is seen as a follow-up measure implemented following a Supreme Court ruling last January that recognized the wage nature of SamsungElectronics’ TAI. At the time, the Supreme Court ruled in a lawsuit filed by retired SamsungElectronics employees seeking severance pay that TAI should be considered wages—compensation for work—and therefore included in the calculation of severance pay.

Since recognizing performance bonuses as wages could lead to increased costs for severance pay and other benefits, some observers speculate that Samsung SDS is switching from cash performance bonuses to stock-based compensation to mitigate legal risks.

However, some employees have raised concerns that external variables, such as stock prices and industry indices, are being factored into the performance bonus calculation criteria. They argue that the amount of compensation could vary depending on market conditions, regardless of individual effort or organizational performance.

Samsung SDS maintains that this is not a unilateral change to the system. The company explained, “We will maintain the current system unless more than 50% of employees agree to the change,” adding, “This is not something the company is forcing.”