SK Hynix and its labor union are at an impasse in their fourth round of negotiations over wages and collective agreements. The company has proposed a plan to pay part of the performance bonuses in stock and to temporarily adjust wages in the event of losses, prompting significant backlash from the union.
According to the minutes from the fourth round of negotiations released by the SK Hynix union, the company presented a revised wage structure that includes changes to the performance bonus payment method and the possibility of wage adjustments during periods of deficit. The two sides have held four intensive negotiations over the past two weeks but have failed to narrow their differences.
The union stated, "The company has maintained its proposal to pay more than half of the performance bonuses in stock, with restrictions on selling for a certain period. Additionally, they continue to insist on the ability to temporarily adjust wages in the event of losses."
The union argues that this proposal undermines the spirit of last year's agreement regarding performance bonuses and that it is unacceptable for members to bear the risks associated with stock price fluctuations.
SK Hynix is experiencing record performance, having reported nearly 100 trillion won in operating profit in the first half of the year. Analysts predict that the company's annual operating profit could reach around 250 trillion won.
In last year's negotiations, the two sides agreed to eliminate the cap on excess profit distribution, which was set at 10% of operating profit, and to maintain this agreement for ten years. Based on this agreement, the estimated average distribution for each of the approximately 35,000 employees this year is projected to be around 70 million won (pre-tax). Eighty percent of the performance bonus will be paid in cash, with the remaining 20% deferred over two years.
Conversely, the company is concerned about the volatility of the memory semiconductor market. In 2023, SK Hynix recorded an operating loss of 7.7 trillion won during a downturn in the semiconductor industry, suggesting that the company's proposal is a precautionary measure against future business uncertainties.
The two sides are scheduled to continue their fifth round of negotiations on August 4, but with significant disagreements remaining over the performance bonus payment method and wage adjustments during losses, further challenges are anticipated.
* This article has been translated by AI.
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