8th Wage Negotiation Held at Cheongju Campus on the 26th
Portion of Remaining Operating Profit After Payouts to Be Used for PS Fund
Detailed Plan Proposed for Distributing Amounts Exceeding the Cap
SK Hynix has proposed to the labor union a plan to significantly raise the maximum payout rate for performance bonuses, in an effort to narrow the gap between labor and management that emerged earlier this year over performance bonus payments. The company also introduced a plan to return any remaining funds after bonus distribution to employees through savings or pension schemes.
According to industry sources on the 27th, SK Hynix’s union for all employees and the management reportedly discussed these matters during the '8th wage negotiation for 2025' held at the Cheongju campus the previous day.
The PS (performance sharing) bonus is an incentive paid once a year, with a maximum of 50% of annual salary (equivalent to 1000% of base salary), depending on annual performance. Since 2021, SK Hynix has allocated 10% of the previous year's operating profit as the fund for PS, distributing it to individuals based on their performance.
Previously, management proposed raising the cap for PS from the current 1000% to 1700%, and to use 50% of any remaining portion of the 10% operating profit fund?after paying out 1700%?as additional PS funds for employees. The other half would be used for future investments and other purposes.
During this round of negotiations, management presented a more concrete plan to guarantee and secure the payout of amounts exceeding the cap. The proposal includes two options?a 'five-year savings scheme' and a 'two-year plus three-year pension scheme'?to ensure the full distribution of these funds to all employees.
Under the savings scheme, if the PS payout rate (IB) falls below a certain level within five years, the accumulated funds will be paid out up to 1700%, and any remaining funds will be paid in a lump sum at the end of the five-year period. The pension scheme involves accumulating the funds for two years, then distributing the entire amount in equal installments over the following three years.
SK Hynix achieved its highest-ever operating profit last year (23.4673 trillion won), and at the beginning of this year paid a PS equivalent to 1500% of base salary and awarded 30 company shares per employee as an incentive. However, the union and employees argued that a higher level of special performance bonus should have been paid, leading to conflict.
In response, SK Hynix gathered employee feedback on new standards for the distribution of excess profit sharing (PS) at both the Cheongju and Icheon campuses in mid-June. The management is expected to continue wage negotiations with the unions for all employees and technical/administrative staff based on the proposals presented.
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