SK hynix unions agree to receive half of bonuses in cash, half in shares
SK hynix headquarters in Icheon, Gyeonggi Province, July 29 / Yonhap
SK hynix’s production workers’ unions on Wednesday approved a revised tentative agreement reached between their representatives and management, under which employees will receive half of their performance bonuses in cash and the other half in company shares, concluding this year’s wage and collective bargaining negotiations without a labor dispute.
According to SK hynix, the two production workers’ unions at the company approved the tentative agreement with a 57.08 percent vote in support. More than 15,000 of the unions’ 16,000 eligible members took part in the vote. The two unions respectively represent production workers at the company’s Icheon plant in Gyeonggi Province and Cheongju plant in North Chungcheong Province.
A key feature of the agreement is that half of the performance bonuses, known as excess profit-sharing, will be paid in cash, while the other half will be paid in the form of treasury shares.
The revised agreement replaces an earlier tentative deal that called for 60 percent of the bonuses to be paid in treasury shares and the remainder in cash, which the two unions rejected in a vote three weeks earlier.
SK hynix has four labor unions, three of which took part in this year’s negotiations. The two production workers’ unions bargained jointly, while the technicians’ and office workers’ union negotiated separately.
The technicians’ and office workers’ union approved the previous 60-40 split, but is also expected to receive bonuses under the 50-50 arrangement because the production workers’ unions have already secured more favorable terms.
The fourth union, established last month as a unified union representing both office and production workers, did not participate in this year’s negotiations because it only recently gained legal recognition.
SK hynix said the agreement is significant because labor and management resolved their differences through revisions even after the initial tentative agreement was rejected.
The agreement also stipulates that up to 3 percent of wages may be deferred when the company posts a loss. The company said this underscores that labor and management will work together to overcome crises during periods of losses.
“We thank the unions and our employees for passing through a difficult process,” the company said in a statement. “We will continue working together to address future challenges.”
The company’s labor and management will hold a signing ceremony before the Chuseok holiday, which begins on Sept. 24. The bonus scheme, for now, is stated to be maintained until 2034.
SK hynix’s wage negotiations gained attention, as they have created ripples across industries over how massive corporate gains should be shared with employees.
After the company agreed to use 10 percent of its operating profit as the financial pool for employee bonuses last year, roughly 33,000 employees became eligible for bonuses worth about 700 million won ($512,000) each. Labor unions at other companies also began demanding similar schemes, fueling broader social tensions.
Though the agreement was approved, more than 40 percent of union members voted against it, as management revised an existing agreement just a year after promising to pay the bonuses in cash and maintain the scheme for 10 years.
The fourth union was established in protest of the change, while individual shareholders filed a lawsuit against SK hynix CEO Kwak Noh-jung, arguing that performance bonuses linked to operating profit should not be paid without shareholder approval.