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)
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