Samsung Electronics has rarely cut its semiannual incentives for its longtime cash cow smartphone division, which continues to struggle to recover from the Galaxy Note 7 fiasco, according to news reports Friday.

Every June and December, the tech giant provides incentives of up to 50 percent of an employee’s monthly salary for its main business divisions -- Information technology & Mobile communications, Device Solution and Consumer Electronics. Additionally, it provides incentives of up to 50 percent for the divisions’ smaller units. When combined, an employee can get incentives of up to 100 percent from both their division and unit. 

The incentives, which are computed based on performance, are divided into A-level at 50 percent, B-level at 25 percent and C-level at 12.5 percent. D-level employees get no incentives.

The IM division, which has long had A-level incentives thanks to strong smartphone sales, reportedly scored at C-level this time due to the Galaxy Note 7 fiasco, which cost Samsung more than $20 billion. The IM division posted 100 billion won ($83 million) in operating sales in the third quarter, a 95 percent fall from the same period of last year.

The DS and CE divisions, for their part, all reportedly got A-level, receiving maximum incentives of 50 percent.

The DS division’s chip business posted strong sales in the third and fourth quarters driven by strong memory chip pricing and demand.

The CE division also had a strong performance as it continued to focus on its lucrative premium home appliances. The division posted 2.3 trillion won in operating sales this year through September, already passing the combined operating profits of 1.2 trillion won last year.

As for other affiliates, Samsung Fire & Marine Insurance and Samsung C&T’s resort division received A-level incentives. Samsung Life Insurance, Samsung Electro-mechanics, Samsung C&T’s trading division, Cheil Industries and S1 Corporation hit B-level. Samsung SDI, which was caught up in the Note 7 issue, and Samsung C&T’s construction as well as fashion businesses marked C-level. The money-losing Samsung Heavy Industries has not received incentives for two consecutive years.


By Shin Ji-hye (shinjh@heraldcorp.com)