SK Hynix Performance Bonuses That Will Change the Future of South Korean Geniuses

The Significance of SK Hynix's 100 Million Won Average Bonus per Employee
Half of China's Top Communist Party Leaders Have Science and Engineering Backgrounds

In my line of work, I have met many people who are called geniuses. Looking back, the first genius I ever encountered was a high school classmate. He consistently ranked first in the entire school. Our alma mater was located on the outskirts of Seoul, but it was considered a prestigious school at the time, sending around 30 students to Seoul National University each year. In my first and second years, I didn't really grasp just how exceptional he was at studying. It was only in our senior year that I realized he was not just a good student. In the nationwide mock exams, which every senior in South Korea takes each month, he was ranked first in the country almost every time, with only one or two exceptions. At that time, about one million people were born each year, and around 800,000 took the college entrance exam. He truly deserved the title of "God of Studying."

He was in the science track, while I was in the humanities. We weren't particularly close. We would just see each other occasionally at a dinner gathering before studying at night. Later on, I met other geniuses, many of whom had some eccentricities. But he was a unique genius who also had a sense of humor and even cared for others. It's rare to find a genius who can join an organization and achieve beyond their abilities without causing conflict.

However, after the college entrance exams, I heard that he cried, saying he had failed the test. The year we took the exam, the government introduced the so-called "apply first, test later" system. Unlike before, students had to take the test at the university they had applied to in advance. On the day of the exam, there was a massive traffic jam. Many parents drove their precious children to the test centers, which led to chaos. A significant number of students couldn't arrive at the test site on time and were devastated. He was one of them, arriving an hour late for the first session. Naturally, I thought he would fail the entrance exam and have to try again the following year. But to my surprise, he was accepted into the Seoul National University College of Medicine, scoring almost as high as the national top scorer.

I remember thinking it was unexpected that he had applied to medical school. At the time, national top scorers usually chose physics, electronic engineering, law, or economics. In fact, that year's top scorer entered the electronic engineering department at Seoul National University. Later, when I heard that he had opened a dermatology clinic, I honestly couldn't understand it. Among our classmates, if anyone were to win a Nobel Prize or invent a technology that would change the world, I thought it would be him. The late Lee Kun-hee, former chairman of Samsung, once said that one genius can feed 100,000 people. Of all the people I know, he was the one most likely to grow into someone who could support 100,000 people.

But now I understand why he made that choice. These days, the most common major chosen by national top scorers is medicine. In fact, almost all of the very top students go to medical school. Dermatology is also one of the most preferred specialties among medical students. The fundamental reason for this trend is money. Being a doctor is one of the most lucrative professions. However, the situation has changed.

SK Hynix has decided to distribute 10% of its future operating profit as performance bonuses to its employees. Based on this year's figures, each employee could receive about 100 million won. The starting salary for new employees at the company, whose average age is around 27 or 28, is about 60 million won. Including performance bonuses, their annual income generally exceeds 100 million won, which is more than doctors of a similar age. Interns, who are two to three years younger than new hires, earn about 69 million won. Residents, who are two to three years older than new hires at Hynix, earn 73 million won, and only those with specialist qualifications earn over 100 million won annually. Hynix employees have already started to earn more than doctors, and the gap is expected to widen next year. The company's performance this year is even better than last year.

If this trend continues, Samsung Electronics, which is fiercely competing with Hynix, will not stand by idly. In advanced industries, talent is the future. If engineers are not treated as well as those at Hynix, there is no future. In fact, Samsung Electronics was the original pioneer of generous performance bonuses. For example, in 2017, then Vice Chairman Kwon Oh-hyun received a special performance bonus of 14.7 billion won, with his annual salary exceeding 24.3 billion won. Former Chairman Kim Ki-nam received a total of 17.2 billion won in 2023, including a 13 billion won retirement payment. The problem is that for regular employees, there is a rule that performance bonuses cannot exceed 50% of their annual salary. Now, it's highly likely that Samsung Electronics will remove the cap on performance bonuses for regular employees as well as executives. We are entering an era where you need to major in science and engineering if you want to earn a lot of money.

China, which is fiercely competing with South Korea in manufacturing, is a science and engineering-oriented country. For starters, Chinese President Xi Jinping graduated from the Department of Chemical Engineering at Tsinghua University. Furthermore, half of the 75 top leaders of the Communist Party have science and engineering backgrounds. If you aim for the upper echelons of society, the numbers say you should go into science and engineering, not law or economics. Companies are also desperately trying to secure science and engineering talent. In 2019, Huawei launched the "Genius Youth" project, offering S-level new hires an annual salary of 400 million won. In 2021, Xiaomi awarded 3.8 billion won in stock to each of its 122 top engineers, totaling 460 billion won. For another 3,904 employees in lower tiers, the company provided an average of 70 million won in stock per person. Currently, South Korea's top students are heading to medical school, while China's are going into science and engineering. I believe SK Hynix's decision to allocate 10% of its profits as performance bonuses will serve as a catalyst to change the future for South Korea's brightest minds.