SK hynix (000660.KS) will put a tentative labor agreement to a second union-wide vote about three weeks after members rejected it by 25 votes. Attention is focused on how the two sides revised the plan to pay part of the company's profit-sharing bonus in shares, the sticking point in the first ballot.
The union will hold an emergency delegates' meeting on the 10th to explain the tentative agreement reached in renewed talks, followed by a full membership vote on the 15th and 16th, according to industry sources on the 9th. Details of what changed from the earlier version will be disclosed at the delegates' meeting.
Under the earlier tentative agreement reached last month, wages would rise 6.3% and 40% of profit sharing (PS) would be paid in cash, with the remaining 60% in company shares. Of the total, shares equal to 40 percentage points could be sold in the same year, while the other 20 percentage points would be paid in two installments of 10 percentage points each, one year and two years later. For this year's payout only, employees could take the same-year share portion in cash instead, allowing up to 80% of the bonus to be received in cash.
The agreement failed in a vote by production-line union members on the 25th of last month, with 7,535 votes against, or 50.08%, and 7,510 in favor, or 49.92% — a margin of just 25 votes. A total of 15,045 members took part. The same agreement passed the union representing technical and office staff with 66.2% in favor.
Opposition inside the production-line union centered at the time on paying the bonus in shares.
Last year, the company and the union scrapped a cap that had limited profit sharing to 1,000% of base pay and agreed to set aside the full 10% of annual operating profit as the funding pool. Under that deal, meant to hold for 10 years, 80% of each employee's calculated bonus would be paid in cash in the same year, with the remaining 20% also paid in cash in installments over two years.
A year later, the tentative agreement called for paying 60% of the bonus in shares, prompting complaints from some members that it departed from the intent of the earlier deal. Members also cited the risk that the actual value of the compensation would swing with the share price.
How the payout method has changed in the new agreement is expected to be the central question. The two sides have continued negotiating since the rejection last month and are aiming to settle the wage and collective bargaining talks before the Chuseok holiday.
SK hynix has a history of reaching a deal after an initial tentative agreement was voted down, improving compensation terms in follow-up talks.
In 2024, a tentative agreement that included a 5.7% wage increase was rejected by the production-line union, with 70.6% opposed. In renewed talks, the wage increase stayed at 5.7%, but an incentive payment was raised by 1 million won to 4.5 million won from 3.5 million won, and spousal parental leave and long-service leave were expanded. The revised agreement passed a delegates' vote with 88.4% in favor.
In 2023, after the first tentative agreement was rejected, the two sides returned to the table and added a 1.2 million won crisis-response incentive payment for all employees. The revised agreement then passed a production-line delegates' vote with 77% in favor.
Speaking at an employee forum on the 2nd, Kwak Noh-jung, president and chief executive of SK hynix, said of the bonus system: "Last year we reached an agreement on the broad framework, and we will work through the details together with our employees." He added, "We will work so that the company and its employees can grow with pride together."
