Samsung Electronics is facing mounting criticism over its newly approved wage and performance bonus system, which grants large payouts to employees across its semiconductor division, including support staff and workers in loss-making units, according to South Korean outlet Chosun.

Critics argue the compensation structure is inequitable, pointing to large bonuses awarded in underperforming semiconductor businesses while employees in consistently profitable divisions, such as smartphones, were excluded. The controversy has intensified concerns over growing divisions between Samsung’s semiconductor and consumer electronics operations.

Industry experts and academics say Samsung’s current model — which ties bonuses largely to business division performance and salary levels — is unsustainable for a diversified electronics company. Proposed reforms include company-wide bonus pools, individual performance-based compensation, and more transparent evaluation metrics. Some experts also advocated structural changes. Sanford Jacoby, a distinguished research professor at UCLA Anderson with appointments in public policy and history recommended the most structural solution, stating, “Samsung must consider spinning off the DS division.” Jacoby proposed that a spun-off DS division pay a fixed sum to headquarters for 10 years, with those funds redistributed across business units to reduce internal conflict.