SK Hynix. [AFP]
SK Hynix. [AFP]

SK Hynix and its union have reached a tentative wage and collective bargaining agreement that would raise salaries 6.3 percent this year and pay up to 60 percent of the company's profit-sharing bonus in stock. Employees will have the option to receive the full bonus in cash for next year's payout — the first year the new system takes effect. The deal also includes a provision for the company to compensate workers in cash for any losses stemming from a decline in the share price.

The union held an emergency extraordinary delegates' assembly Thursday afternoon and shared the details of the "2026 wage and collective bargaining tentative agreement" with its delegates, according to industry sources.

Last year, management and the union agreed to set the profit-sharing bonus, known as PS, at 10 percent of operating profit and to remove the existing payout cap. They also agreed to maintain that bonus calculation framework for 10 years.

Under that arrangement, 80 percent of the PS was to be paid in cash in the same year it was earned, with the remaining 20 percent distributed in two equal installments — 10 percent after one year and 10 percent after two years.

This year's tentative agreement, however, introduces a stock-based component in place of some of the cash payments.

Under the new structure, 40 percent of the PS would be paid in cash and 40 percent in SK Hynix shares. The remaining 20 percent would be deferred and paid in stock in two equal installments — 10 percent after one year and 10 percent after two years — bringing the total stock-based portion to 60 percent of the overall PS.

An exception has been carved out for 2027 payouts, the first year the system would be in place. Employees who do not wish to receive stock may opt for cash instead, meaning it will be possible to receive the entire PS in cash next year.

Some analysts have floated an operating profit scenario of 250 trillion won ($178 billion), and a simple calculation based on that figure suggests each employee's pre-tax bonus could reach around 700 million won.

The union plans to hold a delegate vote in the near future before proceeding to a final ratification of the tentative agreement.

Whether employee opposition will fully subside, however, remains to be seen.

Although management and the union agreed last year to maintain the PS calculation framework for a decade, the payout method has changed after just one year. The growing proportion of stock-based compensation also means that employees' effective take-home pay could vary depending on share price performance.


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