[Edaily Reporter JAEMIN SONG ] Management and labor at SK hynix are struggling to bridge their differences in this year’s wage and collective bargaining negotiations over the method of paying performance bonuses and the restructuring of the wage system. The union is pushing back against management’s proposal—which calls for paying more than half of the Profit Sharing (PS) in stock and temporarily adjusting wages in the event of a loss—arguing that it amounts to a de facto wage cut.

According to industry sources on the 31st, SK hynix management and the union held their fourth round of main negotiations the previous day to discuss the performance bonus payment method and other issues, but reportedly failed to reach an agreement.

According to the details of the negotiations released by the union, management maintained its proposal to pay an amount significantly exceeding half of the PS in stock, with restrictions on selling the shares for a certain period. It is also reported that management stood by its plan to reform the wage system to allow for temporary wage adjustments should the company’s performance turn to a loss.

The union stated that it could not accept the proposal, arguing that it shifts the risk of stock price fluctuations onto employees and could even lead to wage cuts depending on the company’s financial situation. In particular, as the company continues to post record-breaking earnings amid a boom in artificial intelligence (AI) memory, the proposal has sparked growing backlash among employees.

However, management maintains that, given the high volatility of earnings inherent in the memory semiconductor industry, a compensation system that accounts for both boom and bust cycles is necessary. SK hynix recorded an annual operating loss of 7.7303 trillion won in 2023, when the semiconductor market was in a slump.

The key point of contention is whether to modify the performance-based bonus agreement reached by labor and management last year. Both sides agreed to allocate 10% of last year’s operating profit as funds for performance-based bonuses (PS) and to abolish the previous cap of 1,000% of base salary. They agreed to maintain this system for 10 years, with 80% of the PS paid in cash in the current year and the remaining 20% deferred over two years.

However, after management proposed this year to pay a significant portion of the performance-based bonuses in stock, the payment method has resurfaced as the central point of contention in negotiations—just one year after the agreement was reached. The union argues that this proposal “undermines the spirit and fundamental direction of the agreement we worked so hard to reach last year.”

Management and the union are scheduled to hold their fifth round of main negotiations at the Cheongju Campus on the 4th of next month. The union has warned that if management does not present a revised proposal at the next round of negotiations, it will “take necessary action,” raising the likelihood that the negotiations will drag on or lead to collective action.