Samsung cuts pay hike to average 4.1%, freezes raises for board members

Seoul: Samsung Electronics’s management and its workers have agreed to an average 4.1 per cent pay raise for the year, while effectively freezing raises for its board members due to poor performance amid a worsening chip glut and a global slowdown.

The pay raise is lower than the 9 per cent wage hike of the previous year, which was the highest in a decade, and lower than the initial demand from the workers.

The world’s largest memory chip and smartphone maker reached an agreement with representatives of its employees over wages and other labour policies, including extending shortened working hours for pregnant employees.

The announcement was said to be made internally earlier in the day, according to the sources, reports Yonhap News Agency.

Both parties hammered out the compromise, taking into consideration the external headwinds that caused the quarterly profit to plunge nearly 96 per cent in the first quarter.

The management decided to apply last year’s pay policy for board members, effectively putting off its initial plan to raise the pay ceiling for board members by 17 per cent.

Separately, Samsung’s unionised workers, which accounted for around 4 per cent of the total 110,000 workers, have engaged in wage negotiations with the management since late last year.