Samsung Mobile chief gets pay cut by nearly 50% following poor performance

By Kunal Vohra,Director@H2K

While Samsung still sits firmly atop the smartphone world, the company hasn’t been able to maintain the same pace of growth they enjoyed throughout the past few years. After recent financial results showed a 60% drop in net profit year-over-year, Samsung Mobile head JK Shin has taken a pretty steep pay cut. He was paid $630,000 for last quarter’s performance, nearly half of the $1.5 million he earned in Q2.

Despite the poor performance, Samsung as a whole continues to rake in the dough. They reported revenue of $43 billion in the third quarter for a still-not-bad profit boost of $4.3 billion. So why the sharp decline? It’s tough to say without a clear look inside Samsung’s operations, though it’s possible the company’s desire to push innovation in areas of TV and mobile could be driving the costs of research and development way up.

Another possibility is that Samsung simply can’t stop some of these up-and-coming smaller guys from eating into their market share. Worldwide smartphone share is shifting day by day, with manufacturers from the Asian sector seeing perhaps the biggest uptick in market share and sales. Affordable, yet capable, smartphones from Chinese and Taiwan OEMs are capturing the interests and dollars of many, and stiffened mobile competition overall (from the big guys like HTC, Sony, LG and Motorola) means Samsung doesn’t have it quite as easy as they once did.

There’s no easy answer for rebounding, but this price cut for JK Shin should be a big enough kick in the pants to find whatever strategy they can to make sure they reverse course and get back on track to the sort of growth Samsung’s shareholders are used to. We’ll see if the launch of the Samsung Galaxy Note 4 and Note Edge will do anything to help Samsung out as we look ahead to 2015.