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Samsung has a new solution to push employess to work harder

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Last updated: January 18th, 2025 at 11:18 UTC+01:00

Samsung is going through one of the most challenging times in its history. Due to issues in its memory and semiconductor chip businesses, the company's stock prices have fallen drastically compared to six months ago. The South Korean firm is now trying a new solution that could change its fate.

Samsung will tie bonuses of employees to its stock performance

According to a report from TechInAsia, Samsung plans to tie employee bonuses to the company's stock performance. The stock portion of the annual bonus will reportedly range from 50% to 100%, and this percentage will increase based on seniority. Earlier, bonus compensations were paid out in cash.

So, if the company's performance falls, employees will receive fewer shares, and the value of those shares will also reduce based on the stock price.

Jung Bae Lee Samsung Semiconductor Memory

The report also claims that Samsung will restrict its employees from selling shares for 1-2 years, based on their level. This new way of bonus compensation will start this month and will currently be limited to executive-level employees. Non-executive-level employees will also reportedly get this system starting in 2026.

Samsung's biggest issues are in its semiconductor business

Samsung HBM3 IceBolt Chips

Samsung is facing several challenges, the biggest one being its performance in the semiconductor segment. Despite spending billions of dollars over the past few years, it hasn't been able to catch up with TSMC in the foundry segment. In fact, it has lost several high-profile clients, especially after debacles with its 4nm and 5nm process nodes.

The company was once considered the world's best memory chip maker. However, it has fallen behind the likes of Micron and SK Hynix in recent years.

Its HBM3 and HBM3E chips have been facing issues related to overheating, so they haven't been able to supply them in huge quantities to the world's most important AI chip firm, Nvidia.

Recently, Samsung's own smartphone division reportedly decided to buy LPDDR5X DRAM chips for the Galaxy S25 series from Micron instead of going exclusively with in-house DRAM chips made by Samsung Semiconductor.

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