Operating Profit Bonus Demands Spark Debate as Professor Cites Shareholder Rights

Kwon Jae-yeol, a professor at Kyung Hee University Law School, said on the morning of May 15 at an emergency expert forum hosted by the Shareholder Action Institute at the Korea Press Center in Jung-gu, Seoul, that disposal of company profits is an inherent right of shareholders. His remarks came as unions at Samsung Electronics and Samsung Biologics demanded that 15% and 20% of each company’s operating profit, respectively, be distributed as performance bonuses. Kwon explained that, under commercial law, authority over the disposal of operating profit belongs to shareholders, with specific execution decided by a shareholders’ meeting resolution. He said operating profit is net profit after deducting selling and administrative expenses such as wages and welfare costs, and argued that employees who have already received salaries would be preempting profit intended for corporate taxes and shareholder dividends. The dispute is expected to continue in labor-management talks over bonus standards and shareholder authority. Source: rss.donga.com