SK hynix held its first meeting with employees since a tentative wage and collective bargaining agreement was voted down last week, explaining the rationale behind its revamped bonus system. With employees continuing to push back against a plan to pay part of their bonuses in company shares, the chipmaker reiterated that it would preserve fair compensation for performance while weighing the interests of both shareholders and employees.
SK hynix held a "Together, THE Communication Event" at its Bundang campus in Seongnam, Gyeonggi Province, on the 2nd, according to industry sources on the 3rd. It was the first official communication event held since the tentative agreement was rejected in a union vote on the 25th of last month. The event was broadcast live to all of the company's domestic worksites.
Jin Bo-gun, head of SK hynix's corporate culture division, said of the change in the bonus payment method that "the company will protect its employees and ensure they suffer no disadvantage, so that our employees' performance and compensation can be recognized with confidence in society."
On the reasoning behind paying part of the bonus in company shares, Jin emphasized the sustainability of the system. "We needed to think hard about how to make the bonus system sustainable," he said. "Considering that the interests of shareholders, our biggest stakeholders, and those of our employees are intertwined, we considered paying in shares."
He also stressed that as the size of the bonuses has grown, the interests of shareholders and employees must be considered together. "Finding answers to the questions society is asking, and presenting them first, is the way for our employees' performance to be recognized with confidence," he said. "I sincerely thank the labor union for shouldering a difficult burden with us and putting our heads together."
SK hynix management and the union had earlier drawn up a tentative agreement to raise wages 6.3% this year and to pay 40% of profit sharing (PS) bonuses in cash and the remaining 60% in company shares. But in a vote by members of the production workers' union on the 25th of last month, a majority voted against it, rejecting the agreement. The margin between votes for and against was just 25.
The introduction of share-based payment just a year after the company decided to pay PS bonuses entirely in cash is seen as having fueled resistance among some employees.
Kwak Noh-jung, president and chief executive of SK hynix, said at the event that "we reached an agreement on the broad framework last year, and we will work through the finer details together with our employees."
Kwak added, "This is a process of building a better future together and making a sustainable company. We will work so that the company and its employees can grow with pride together."
With the tentative agreement rejected, labor and management are expected to return to the negotiating table over issues including the bonus payment method. Since the company has said it will maintain the broad rationale of share-based payment while discussing detailed terms with employees, the ratio of cash to shares and the payment method are expected to be the main sticking points in the renewed talks.
