200 Samsung managers return a quarter of their bonuses, ahead of earnings report

July 18, 2014
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According to sources familiar with the South Korean tech industry, approximately 200 managers who work for Samsung’s handset division have chosen to return a quarter of their first-half bonuses. The news comes as the smartphone giant is expected to post its worst quarterly earnings report in the past two years.

Gestures like this are not uncommon in South Korea’s corporate world, where such decisions aim to show that managers are taking part responsibility for the earnings decline. The returned bonuses will also help give a slight boost to Samsung mobile division’s profit margin. The source did not give any details on the total value of the returned bonuses, although local media reports estimate that the amount is likely to exceed 3 billion won ($2.92 million).

A large portion of Samsung’s worries appear to stem from greatly increased competition in the premium segment of the smartphone market, which is resulting in a slowdown in Samsung’s market growth. The company is facing particularly strong competition from cheaper Chinese manufacturers, such as Xiaomi, as well as Apple’s iPhone, and the other usual line-up of competitors. Counterpoint’s latest research showed that the new Samsung Galaxy S5 flagship was outsold throughout May by last year’s Apple iPhone 5.

It is worth noting that Samsung is still expected to post a substantial profit for the second quarter of the year. The company is anticipating that its Q2 operating profit will be in the region of $7.1 billion, down from $9.4 billion posted a year, a decline of 25 percent. We will have to wait to see exactly how well, or poorly, the smartphone department fared compared with last year. Samsung will announce its full earnings report for April to June on July 31st.

Comments

  • MasterMuffin

    That 2 million $ won’t make any difference. Even if it’s a nice gesture, they should just keep the money :)

    • disaster

      i agree why give it away. its not like the company is bleeding money it’s still 7 billion lol

      • n900mixalot

        It’s a showing of solidarity. And responsibility for their ridiculous decision to flood the market with ridiculous versions of the same devices.

        • MasterMuffin

          But quarter is really nothing. If they really feel like they did ridiculous decisions, why take bonuses at all? Returning quarter is nothing really

    • Mohamed Barzeen

      Mastermuffin enough off f ur trollness… learn to appreciate…. bad mufin

      • Anonymousfella

        What?

      • MasterMuffin

        Yiss… Mi trollness iz nuff… Me very sorry…

    • Timmy

      In ‘Merica, corporate CEOs who have big bonuses despite a losing quarter give back by getting the 55′ yacht (instead of the 75′ one) and fly on commercial airlines (instead of their private jet). Some even (gasp!) drink domestic beer.

      • MasterMuffin

        Poor gentlemen!

    • Mike Reid

      This is “theatre”.

  • Aar0nC

    seems like a good strategy for those managers to keep their jobs.

    • disaster

      well maybe they’re worried. samsung gave a huge bonus last year in Q4 so it’s balancing out

  • JL

    By giving the money back, it shows accountability for mistakes.

    I bet the managers at HTC and Sony never do this.

    I bet the managers at Apple take more.

    Stay classy Sammy.

  • Blowntoaster

    it’s not really faring poorly. the rest of the world is just catching up with Samsung.
    time for them to rethink the strategy a bit. they are still selling boatloads of phones, there is just more choice now and better competition.