Samsung Electronics workers cheer stock drop, fueling shareholder backlash

A post on the Samsung Electronics board of Blind, an anonymous workplace community app [Online community]

Amid Samsung Electronics' share price falling to 210,000 won ($157), some employees have stirred controversy by posting on an anonymous online community to welcome the decline. Because a special performance bonus due next year will be paid in company stock, a lower share price means more shares for the same payout. Shareholders who have suffered losses are pushing back, asking whether the company's workers have any regard for investor pain.

Multiple posts celebrating the recent share price drop appeared Thursday on the Samsung Electronics board of Blind, a workplace anonymous community app, according to industry sources.

One employee, identified only as A, wrote, "Please let the share price fall to 100,000 won." Another, identified as B, argued that "from the Device Solutions (DS) division's perspective, a higher share price only increases the risk tied to the special performance bonus (OPI2)" and that "it's better to receive the bonus when the share price is at its lowest."

A third employee, identified as C, wrote on Blind's stock investment board: "Even when the share price falls, Samsung Electronics employees keep winning. Even if there are stock losses, the gap will only widen as real estate in Dongtan and bonuses surge."

The reaction stems from a special performance bonus scheduled for payment between late March and early April next year. Samsung Electronics and its union agreed to fund the bonus using 10.5 percent of the DS division's operating profit this year. After taxes and insurance premiums are deducted from each employee's individual bonus amount, the remainder is paid out in Samsung Electronics shares.

Because the number of shares is determined by the share price at the time of payment, a lower price means more shares for the same amount. If an after-tax bonus is 100 million won, an employee would receive 400 shares at 250,000 won per share, or 500 shares at 200,000 won. If the share price rebounds afterward, those who received more shares stand to gain proportionally more.

Comments posted on the Blind board [Online community]

Ordinary shareholders who have taken losses from the sharp decline, however, are growing increasingly frustrated with the employees' remarks. Samsung Electronics shares closed Thursday down 9.48 percent, or 22,000 won, at 210,000 won. That marks a drop of 164,500 won, or 43.9 percent, from the peak of 374,500 won recorded in June.

Shareholders have criticized the posts, asking how employees could show so little empathy while investors suffer losses. The backlash intensified after some Samsung Electronics employees left mocking comments such as "Who told you to buy?" and "It's a sweet deal for us if it drops further — please fall to 70,000 won."

One Blind user who identified themselves as a shareholder vented frustration, writing: "You made money selling semiconductors with my investment, and now it makes sense to hand out 10 percent of the profits as employee bonuses?"

bbo@heraldcorp.com