Police open investigation into Samsung, SK hynix chiefs over bonuses after shareholder complaint filed
The investor group contends that the bonus agreements reached violate shareholder rights with the improper transfer of company assets.
From left, the flag of Samsung Electronics at the company's office in Seocho District, southern Seoul, and the logo of SK hynix outside the company's headquarters in Icheon, Gyeonggi
YONHAP
The Gyeonggi Nambu Provincial Police Agency has launched a formal investigation into a complaint filed by a shareholder rights group accusing the chief executives of Samsung Electronics and SK hynix of breach of trust, arguing that performance-based bonuses should not be subject to collective bargaining.
“The complaints against the chief executives of Samsung Electronics and SK hynix, alleging breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, have been assigned to the first and second investigation divisions of the Gyeonggi Nambu Provincial Police Agency, respectively,” civic group Korea Shareholders Movement Headquarters said Wednesday.
On July 22, the group filed complaints with the National Office of Investigation against Samsung CEOs Jun Young-hyun and Roh Tae-moon and SK hynix CEO Kwak Noh-jung. The group accused them of failing to adequately review labor-management agreements before approving them.
The latest wage agreements state that Samsung will provide a special semiconductor performance bonus equivalent to 10.5 percent of business performance earnings and that SK hynix will allocate 10 percent of the semiconductor division's operating profit to employee bonuses.
The shareholders group argued that the executives compromised excessively with labor unions' demands for performance-based bonuses, which created a structure that allowed company assets to be transferred improperly. It claimed that such actions constitute a breach of trust.
The investor group has consistently maintained that calculating and allocating bonuses based on a predetermined percentage of pretax operating profit is unlawful.
It also argues that the distribution of company funds, including performance bonuses, should require approval by shareholders at a general meeting rather than being determined through labor-management negotiations.
The group also submitted a complaint to the Corruption Investigation Office for High-ranking Officials against Labor Minister Kim Young-hoon last month on charges of abuse of authority and obstruction of the exercise of rights alongside coercion.
It alleges that Kim overstepped his role by personally mediating a single company's labor negotiations, helping Samsung and its union reach a tentative agreement that averted a strike planned for May, and has called for him to be held accountable for the extent of that intervention.
BY SHIN HYE-YEON [kim.jiye@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
