South Korean memory chip giant SK hynix has reached a tentative agreement with its labor union on the 2026 wage and collective bargaining terms, with the key change centered on a major overhaul of how performance bonuses are paid out.
The preliminary deal, reported by Yonhap on the 20th, includes a 6.3% base salary increase and a revision to the existing profit-sharing (PS) system—40% of the bonus pool will be paid in cash for the current year, while the remaining 60% will be issued in the form of company stock. If the agreement is finally ratified, it would mark another significant shift in SK hynix's performance bonus framework, just a year after it was last restructured.
The union held an emergency general meeting on August 20th to brief members on the tentative terms and plans to hold a representative vote in the near future to finalize the agreement. However, the transition to stock-based payouts means employees' actual compensation will now be tied to the company's share price, a change that could spark discontent among some workers.
Bonus Structure Shift: Cash Portion Shrinks, Stock Payouts Take the Lead
This agreement introduces a substantive change to the performance bonus payment structure. Under the new plan, 40% of the total bonus pool will be paid in cash for the current year, with the remaining 60% distributed as company stock. Of the stock portion, 40% can be liquidated within the same year, while the other 20% will be subject to deferred payment arrangements.
Previously, SK hynix management and labor had agreed last year to allocate 10% of the prior year's operating profit as the bonus pool, with no cap, and committed to maintaining that system for 10 years. That earlier plan stipulated 80% of the bonus be paid in cash in the current year, with the remaining 20% split into two equal deferred cash payments over the following two years. This latest adjustment represents a substantial deviation from the originally agreed terms, arriving just a year after that deal was struck.
Potential Payout Scale: Per-Capita Pre-Tax Bonus Could Reach 700 Million KRW
According to securities industry projections, if SK hynix achieves full-year operating profit of 250 trillion KRW this year, the bonus pool would total 25 trillion KRW—equivalent to 10% of operating profit. With roughly 35,000 employees, a simple average calculation puts the per-capita pre-tax bonus at approximately 700 million KRW (about 3.38 million CNY).
Under the new payout structure, based on that average figure, around 280 million KRW would be received in cash, while approximately 420 million KRW would be issued in stock. Actual individual payouts will vary depending on job grade and performance evaluation results. The agreement also includes other provisions, such as an increase in employee welfare points.
Risk of Employee Pushback Remains, Final Approval Pending Vote
Although a framework has been agreed upon in principle, the successful passage of the representative vote is not guaranteed. Analysts point out that the 10-year system established just last year is now being revised after only one year, and the stock-based payment method directly links actual compensation to share price movements. Some employees remain cautious about this change, and internal resistance is expected to persist in the short term.
The union plans to expedite the representative voting process to formally confirm the final terms of the agreement.
Comments