South Korea’s top conglomerate Samsung Group said Friday it would freeze wages for its executives next year, a move apparently reflecting attempts to recoup falling returns from care businesses.
Paychecks for around 2,000 executives at the business group, including Samsung Electronics Co., will be fixed throughout 2015.
Incentive pay, however, will continue to be provided depending on each divisions’ earning performances, the group said.
“The pay freeze is aimed at urging the executives to take the initiative in overcoming hard conditions,” an official from Samsung Group said.
The belt-tightening move came as the group’s key affiliate, Samsung Electronics, recorded consecutive quarterly earnings falls amid the rise of Chinese rivals aggressively expanding their shares in the smartphone market.
Samsung Electronics, the world’s No. 1 maker of smartphones, saw its market share decline 7.7 percentage points on-year in the third quarter of 2014 to 24.4 percent of the global market, data compiled by market tracker Gartner Inc. earlier showed.
Major Chinese brands, in contrast, expanded their presence in the global market, with Huawei, Xiaomi and Lenovo taking up 15.5 percent of the market in the third quarter, up 4.1 percentage points on-year.
Samsung Electronics took other cost-saving measures this year, including having executives travel in economy class for flights under 10 hours and encouraging employees to take vacations instead of receiving pay for unused time off.
It also relocated some employees in finance, human resources and public relations divisions to sales, production management and other offices. (Yonhap)
