Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

Samsung handset division managers return part of bonuses: source

[July 18, 2014]  By Se Young Lee

SEOUL (Reuters) - Nearly 200 managers at Samsung Electronics Co Ltd's mobile division have voluntarily returned a quarter of their first-half bonuses, a source with direct knowledge of the matter said, with the firm poised to post its worst quarterly profit in two years.

Samsung Electronics earlier this month announced operating profit guidance for April-June that was far below most analysts' forecasts. The world's biggest smartphone maker is facing slowing market growth and intensifying competition.

The decision to return some of the bonus was partly a gesture to demonstrate that managers are taking responsibility for the earnings decline, and partly a way to show that management will work harder, the source told Reuters on Friday, declining to be identified due to the sensitivity of the matter.

Such gestures are not uncommon in South Korea's corporate world, where senior employees of listed companies have been known to take similar steps when performance dips. The source did not give further details, though local media reports estimated that the value of the returned bonuses would likely exceed 3 billion won ($2.92 million).

A Samsung Electronics spokeswoman declined to comment.

Samsung's cash-cow smartphone business has been losing market share as Chinese rivals such as Xiaomi and Lenovo Group Ltd offer increasingly feature-rich phones at lower prices.

Meanwhile, a survey of 35 major global markets by researcher Counterpoint showed the flagship Galaxy S5 smartphone was outsold by Apple Inc's iPhone 5S in the month of May, suggesting that the device was not selling as well as hoped.

Samsung pointed to inventory buildup for its mid-to-low tier products as well as the strength of the South Korean won in its earnings guidance last week. Samsung will disclose its full earnings for April-June on July 31.

(Editing by Tony Munroe and Ryan Woo)

[© 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.