SEOUL, September 10 (AJP) - SK hynix and its labor union have reached a revised tentative wage agreement that increases the cash portion of employee performance bonuses, following the rejection of an earlier deal by union members.
Under the revised agreement, 50 percent of the company's profit-sharing bonus, or PS, will be paid in cash and 50 percent in shares, compared with a 40-60 split under the previous proposal, said a company official.
Of the total PS, 80 percent will be paid in the year following the performance period, consisting of 50 percent in cash and 30 percent in shares. The remaining 20 percent will be deferred and paid in shares over the following two years, with 10 percent distributed each year.
The revision comes after union members narrowly rejected the previous tentative agreement last month. The proposal was voted down by just 25 votes, with 50.08 percent opposing the deal and 49.92 percent supporting it.
The earlier agreement had drawn concerns among employees over the increased use of stock-based compensation, as the value of shares can fluctuate before they are received.
Under the revised plan, employees who prefer a higher proportion of stock will be able to increase the share-based portion from the default 50 percent to as much as 100 percent in 10-percentage-point increments.
The company also agreed to bring forward the remaining 20 percent of PS based on last year's performance that had originally been scheduled for deferred payment over the next two years.
SK hynix and the union have been renegotiating details of the compensation structure since the first tentative agreement was rejected.
Union members are scheduled to vote on the revised agreement on Sept. 15 and 16. If approved, the vote will finalize the wage agreement, the SK hynix official said.
AJP Takeaways
- SK hynix revised its tentative bonus deal to increase the cash portion of PS to 50 percent from 40 percent, while cutting the stock portion to 50 percent from 60 percent.
- Under the basic structure, 80 percent will be paid upfront — 50 percent in cash and 30 percent in shares — while 20 percent will be deferred over two years.
- Union members will vote on the revised agreement on Sept. 15-16 after narrowly rejecting the previous proposal by 25 votes.
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