SK Group Chairman Chey Tae-won, SK Hynix CEO Kwak Noh-jung, and outside director and board chairman Ko Seung-beom, along with other executives, mark the launch of SK Hynix's NASDAQ ADR trading at the opening bell ceremony at the NASDAQ MarketSite in New York on July 11 (local time). [Provided by NASDAQ]
SK Group Chairman Chey Tae-won, SK Hynix CEO Kwak Noh-jung, and outside director and board chairman Ko Seung-beom, along with other executives, mark the launch of SK Hynix's NASDAQ ADR trading at the opening bell ceremony at the NASDAQ MarketSite in New York on July 11 (local time). [Provided by NASDAQ]

SK Hynix has proposed paying more than half of employee bonuses in company stock subject to a lockup period, while also raising the possibility of temporarily adjusting wages if the company posts a loss. The union has issued an ultimatum, warning it will take action if management does not present a revised offer at the next round of talks.

Management and the union held their fourth main bargaining session on wages and collective agreements on Thursday. At an earlier session, management proposed paying more than half of the performance bonus in shares rather than cash, with a restriction on selling those shares for a set period. Management also raised the possibility of temporarily adjusting wages in the event of a loss, sources said.

The union told management it "cannot under any circumstances accept proposals that undermine the spirit of last year's labor-management agreement on performance bonuses — and will absolutely not accept any arrangement that forces union members to bear the risk of share price fluctuations."

The union also conveyed that "a plan to temporarily adjust wages on the grounds of a loss does not conform to the fundamental principles of a labor union."

The union issued an ultimatum warning that if the company maintains its position without offering a revised proposal at the fifth main bargaining session, set for Tuesday, it will take action.

The union pushed back against the proposals as a betrayal of the intent behind last year's performance bonus agreement. "We cannot accept a structure that makes union members bear the risk of share price movements, and a plan to temporarily cut wages citing company losses likewise does not align with the union's core principles," it said.

The union also said management's revised position on this year's demands falls far short of what members expect.

The union said that if the company holds its current position through the fifth main bargaining session, it will conclude that negotiations alone can no longer resolve the dispute and will take whatever action is necessary.

The next main bargaining session is scheduled for the Cheongju campus on Tuesday.

Earlier, SK Hynix management and the union agreed during last year's negotiations to remove the cap on the profit-sharing bonus — known as PS, funded by 10 percent of operating profit — and to maintain the arrangement for 10 years.

Under that agreement, 80 percent of the PS payout is to be paid in cash in the year it is earned, with the remaining 20 percent — 10 percent per year — deferred and paid out over two years.

With SK Hynix's operating profit this year projected to reach around 270 trillion won ($186 billion), a simple calculation dividing 10 percent of that figure by the total workforce of roughly 35,000 employees suggests an average payout of approximately 700 million to 800 million won per person before taxes.


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