Samsung Executives See Bonuses Grow as Shares Hit Record High

Samsung’s had one of its best years in a long time. Whether a company is meeting its own benchmarks often comes down to how its stock is performing in the market. After months of mixed sentiment, investors are clearly leaning bullish. Lately, Samsung’s main engine has been its memory chip business, which has been doing the heavy lifting.

As the memory supercycle gains strength, Samsung’s semiconductor business is delivering better results, and that’s clearly improved sentiment around the stock. Shares have continued to rise and recently reached new record highs. Strong earnings played a role, but so did the broader view that Samsung is well positioned to benefit as demand for DRAM and NAND recovers.

Samsung executives now have more skin in the game as shares climb

There’s another factor worth noting: how Samsung pays its top executives. Last year, the company shifted senior leaders to a stock based Outperformance Incentive (OPI system). Instead of receiving large cash bonuses, they’re required to take a significant portion, and in some cases all, of their incentive pay in company shares.

Under the OPI structure, payouts can reach up to 50 percent of annual salary, within 20 percent of excess profits. The percentage increases with rank, from at least half for senior vice presidents to 100 percent for registered executives.

That means leadership is directly exposed to the company’s share price. TM Roh, who leads the DX division, received 7,299 shares valued at about 1.17 billion won at the time of the grant. Jeon Young-hyun, head of the semiconductor focused Device Solutions unit, also took his payout in stock. He received 10,652 shares as part of his latest performance award, valued at 1.7 billion won.