Samsung Electronics will link executive bonuses to stock performance starting January 2025, marking a shift from cash to stock-based compensation.

The stock portion of the annual bonus will range from 50% to 100%, with the percentage increasing based on seniority.

Executives will be restricted from selling these shares for one to two years.

This move comes as Samsung faces challenges in the semiconductor market, particularly competing with SK Hynix in memory chip production for AI.

The bonus system will adjust according to market performance, meaning if the stock price drops, executives will receive fewer shares.

Samsung may expand this program to non-executive employees by 2026, though participation would be voluntary and not linked to market performance.