[Edaily Reporter JAEMIN SONG ] SK hynix management and labor have reached a tentative agreement on this year’s wage and collective bargaining agreement, under which 60% of the profit-sharing (PS) payment will be distributed in the form of company stock. With a compromise reached on the payment of performance-based stock—the most contentious issue—the wage and collective bargaining negotiations are now moving toward a final settlement.

According to SK hynix on the 20th, management and labor have tentatively agreed that 40% of the PS payment will be paid in cash and 40% in company stock in the current year. The remaining 20% will be deferred and paid in company stock—10% one year later and another 10% two years later. This structure results in 60% of the total performance bonus being paid in company stock.

The 40% of shares paid out in the current year may be sold in the year they are received. The deferred portions may be sold one year and two years after receipt, respectively. Employees may choose one of two options for the deferred payments: either lock in the number of shares to be received in the year of payment, or lock in the total amount to be received and have the number of shares determined based on the stock price at the actual payment date.

Employees may also choose the proportion of shares they receive. While 60% of the PS is set as the default standard for stock payments, employees may increase the stock proportion to a maximum of 100% if they wish. In 2027, the first year of implementation, employees with valid reasons will be granted the option to receive cash, taking into account existing financial management plans and other factors.

When calculating the number of shares, the lowest closing price among three specific dates—the date of the preliminary annual earnings announcement, the PS cash payment date, and the stock grant date—will be applied. This is a measure designed to mitigate the burden on employees resulting from a potential reduction in the number of shares they receive due to stock price fluctuations.

Previously, last year, management and labor agreed to maintain a system for 10 years whereby 10% of operating profit would be allocated as PS funding and the payment cap would be abolished. At that time, it was decided that 80% of the PS would be paid in cash in the current year, and the remaining 20% would be paid in cash over two years, 10% each year. The union has opposed the company’s stock payment proposal, arguing that it not only revises last year’s agreement after just one year but also shifts the risk of stock price fluctuations onto employees.

The tentative agreement also includes a provision to defer up to 3% of wages in the event of a loss. However, this will be implemented only after management and labor agree on specific crisis-management measures, including employment stability measures, and the deferred wages will be paid immediately once the company’s operations return to normal.

SK hynix explained, “We have refined the performance bonus system to better align the interests of all stakeholders, embodying the principle that employees grow alongside shareholders,” adding, “Management and labor have united in their commitment to sharing both performance and crises.” The company also emphasized that management and labor developed their own crisis-management model based on past instances of voluntary unpaid leave and the partial deferral of wages during the 2023 semiconductor downturn.