New policy expands bonus options after previously being limited to executives
Samsung Electronics is giving all employees the option to receive a portion of their annual performance bonus in company stock, expanding a benefit that was previously exclusive to executives, according to reports.
The tech giant has notified employees this month that they may choose to take between zero and 50% of their performance-based incentive for 2025 in Samsung shares.
The bonuses, which are scheduled to be paid on January 30, can be taken in Samsung shares in 10% increments, The Korea Bizwire reported, citing people familiar with the decision.
Employees may still receive their entire performance bonus in cash if they choose to do so, according to the report. But those who agree to hold the shares for at least one year will receive an additional 15% of the stock amount as an upfront grant.
The new stock-based bonus is an expanded benefit that was previously limited to executives of Samsung Electronics, The Korea Bizwire reported.
The report said registered executives were previously required to receive 100% of their performance bonuses in company shares. Presidents had to take at least 80% of their performance bonus in stock, while vice presidents had to take at least 70%.
According to the report, the value of the stock-based bonus would also be reduced accordingly if the company's share price went down during the one-year holding period.
The revised version of Samsung's stock bonus benefit comes as its share price surged over the past year, The Korea Bizwire reported.
Offering share options
J.P. Morgan Workplace Solutions said employee stock options are a common equity compensation type offered by organisations to help recruit, retain, and motivate employees.
"The better the company does, the greater the rewards. Employees are incentivised to work harder and be more productive as their performance can positively impact how much they can earn," it said.
It also noted that offering stock options will make employees "think like owners."
"Stock options give employees an opportunity to have ownership in the company. It means they are likely to behave as an owner and align their own goals more with the company's missions and goals," it said.
