{"id":113320,"date":"2026-08-09T02:59:16","date_gmt":"2026-08-09T02:59:16","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/113320\/"},"modified":"2026-08-09T02:59:16","modified_gmt":"2026-08-09T02:59:16","slug":"sk-hynix-wage-talks-hit-turbulence-over-stock-based-bonuses","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/113320\/","title":{"rendered":"SK hynix Wage Talks Hit Turbulence Over Stock-Based Bonuses"},"content":{"rendered":"

\"SKSK hynix headquarters in Icheon, Gyeonggi Province. Yonhap News<\/p>\n

SK hynix (000660.KS) and its union are clashing head-on over this year’s wage and collective bargaining agreement. Management has moved to overhaul the pay system by proposing to pay part of performance bonuses in company stock and to allow wage adjustments in the event of a deficit. The union is pushing back, arguing that the plan effectively reverses the bonus structure agreed upon last year and shifts management risk onto employees. After negotiations began in late June, the two sides have failed to find common ground through five rounds of main talks, raising the possibility of collective action.<\/p>\n

According to the industry on the 9th, SK hynix’s labor and management expressed sharp differences in the fifth round of main talks for the 2026 wage and collective bargaining agreement on the 4th, failing to reach agreement.<\/p>\n

The biggest point of contention is the method of paying profit sharing (PS). Management is reported to have proposed paying more than half of the PS, currently distributed mainly in cash, in company stock and restricting its sale for a certain period.<\/p>\n

The union is dismissing management’s proposal, saying it changes the bonus agreement reached last year after only one year. The union argues that employees would have to bear the risk of losses from stock price declines, and that tax issues could arise, such as earned income tax being levied based on the market price on the date the shares are granted. Above all, it says paying performance compensation that should be received in cash with assets that carry investment risk is difficult to accept.<\/p>\n

Last year, SK hynix’s labor and management agreed on a wage and collective bargaining agreement that set a 6% wage increase and used 10% of annual operating profit as the PS funding source, in exchange for abolishing the previous payment ceiling of 1,000% of base salary. Under the agreement, 80% of each individual’s calculated amount is paid in the applicable year and the remaining 20% is paid over the following two years, a system to be maintained for the next 10 years.<\/p>\n

\"null<\/p>\n

However, as operating profit surged amid the artificial intelligence (AI) chip boom, the scale of the “10% of operating profit bonus” grew larger than expected. Voices inside and outside the company have called for considering the large-scale cash outflow and fairness with stakeholders such as shareholders and partner companies.<\/p>\n

In particular, the wage and collective bargaining talks entered a new phase after SK Group Chairman Chey Tae-won said on the 15th of last month at a press meeting during the Korea Chamber of Commerce and Industry’s Jeju Forum that, regarding performance bonuses, “employees alone should not become happy while breaking the happiness of stakeholders.” Chey said, “We need to determine whether performance bonuses actually have a negative impact on stakeholders, including shareholders.”<\/p>\n

Since then, the wage and collective bargaining talks have begun to discuss in earnest a plan to convert part of the bonuses into stock instead of cash. Management’s position is that using company stock can reduce cash outflow while allowing employees to participate in enhancing long-term corporate value. Underlying this is the judgment that securing cash is directly linked to future competitiveness, given the nature of the semiconductor industry, which requires tens of trillions of won to build advanced fabs.<\/p>\n

Furthermore, the “wage adjustment in the event of a deficit” that management proposed to the union is also serving as a flashpoint. Management’s position is reportedly that, given the high volatility of the memory market, a structure is needed that shares gains during booms while flexibly adjusting labor costs during downturns. During the memory downturn in 2023, SK hynix posted an annual operating loss of 7.7 trillion won.<\/p>\n

The union is pushing back, viewing this as effectively a “wage cut during a deficit.” It argues that the company is passing on the risks of its management decisions and the semiconductor market conditions to employees. Within the union, it is reported that if management’s argument, premised on the sacrifice of union members, is maintained, the possibility of collective action is being raised, as it would be difficult to resolve through negotiations alone.<\/p>\n

In addition, union members are demanding a wage increase at last year’s level (6%) and the implementation of an in-house mortgage loan program of around 500 million won, the same level as rival Samsung Electronics. SK hynix’s current in-house housing loan limit is 100 million won.<\/p>\n

With both sides running on parallel lines, the likelihood of prolonged negotiations is growing. Last year, too, labor and management concluded wage negotiations on September 5 after a long tug-of-war. This year, however, with the issue of revising the bonus agreement signed last year compounded by the new point of contention over wage adjustments, a solution has been hard to find.<\/p>\n

Some observers predict that if the wage and collective bargaining talks drag on, SK hynix’s plan to expand production of sixth-generation high bandwidth memory (HBM4), a key revenue source, could also be disrupted. SK hynix began mass-production shipments of HBM4 in the second quarter of this year. It plans to expand production in earnest from the second half, and if the union takes collective action, the production schedule could be affected.<\/p>\n

“With not only performance bonuses but also the basic wage system on the negotiating table, it is difficult for either side to make concessions easily,” an industry official said. “At a time when HBM4 production expansion is getting into full swing, having labor-management conflict spread to the production floor is a burden for both the company and the union.”<\/p>\n","protected":false},"excerpt":{"rendered":"SK hynix headquarters in Icheon, Gyeonggi Province. Yonhap News SK hynix (000660.KS) and its union are clashing head-on…\n","protected":false},"author":2,"featured_media":113321,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[2589,4287,800,3532,4214,241,240,275,58283,508],"class_list":["post-113320","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sk","tag-chey-tae-won","tag-hbm4","tag-labor-union","tag-performance-bonus","tag-profit-sharing","tag-sk","tag-sk-group","tag-sk-hynix","tag-stock-based-pay","tag-wage-negotiations"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/113320","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=113320"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/113320\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/113321"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=113320"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=113320"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=113320"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}