[Edaily Cho Yong Seok Reporter Song Jae-min] Labor and management at SK Hynix have reached a tentative agreement on a wage and collective bargaining agreement that stipulates 60% of the Profit Sharing (PS) payments will be distributed in the form of company stock.

According to industry sources on the 20th, SK Hynix’s labor and management have tentatively agreed to pay 40% of the PS in cash and the remaining 60% in company stock. Of the stock portion, 40% of the PS will be paid out in the current year. The remaining 20% will be distributed in two installments of 10% each, one year and two years later, respectively.

Based on the securities industry’s forecast of SK Hynix’s annual operating profit of 250 trillion won this year, the PS fund amounts to 25 trillion won. This is because last year, management and labor agreed to allocate 10% of operating profit as funding for the PS. Dividing this amount among approximately 35,000 domestic employees results in an average PS per person of approximately 710 million won before taxes. However, the actual payment amount is expected to vary depending on job level and individual performance evaluations.

Under the revised payment method, employees will receive an average of approximately 280 million won per person in cash. About 420 million won will be paid in company stock. Of this, shares worth approximately 280 million won can be sold in the year they are received. The remaining shares, worth approximately 140 million won, will be received in two installments—one year and two years later.

Employees can choose in advance whether to receive the deferred portion as shares or as cash. The number of shares is calculated using the lowest of three closing prices: the date of the preliminary earnings announcement, the PS cash payment date, and the stock payment date. The default ratio for stock payments is 60%, but employees can increase this to a maximum of 100% if they wish. In 2027, the first year of implementation, employees with valid reasons will also be given the option to choose cash.

SK Hynix explains that it has shifted from a cash-centric compensation structure to a stock-based compensation system linked to the company’s long-term growth, thereby reducing the burden on employees caused by stock price fluctuations. The aim is to align the long-term interests of employees, the company, and shareholders.

Management and labor have agreed to share not only performance but also crises. In the event of a loss, they will first agree on crisis-management measures—including employment stability measures—and then defer up to 3% of wages. Once business operations return to normal—such as when the company returns to profitability—the deferred wages will be paid in a lump sum. An SK Hynix official stated, “Management and labor have reached a consensus on sharing both performance and crises.”

However, some in the business community predict that the controversy surrounding the so-called “N% performance bonus”—where a certain percentage of operating profit is allocated as performance bonuses—will spread further. Following SK Hynix’s use of 10% of its operating profit as a fund for performance bonuses, Samsung Electronics’ DS Division will also receive a special management performance bonus funded by 10.5% of this year’s operating profit. The debate over the appropriate allocation between employee compensation, capital investment, and shareholder returns is also expected to intensify.

Meanwhile, tensions are mounting between labor unions at Samsung Electronics over the distribution of performance-based bonuses by business division. The Samsung Electronics branch of the Samsung Group Inter-Company Labor Union—which primarily represents the DS Division—sent an official letter today to the Donghaeng Union, which primarily represents the DX Division, stating that it would not form a joint bargaining team for the 2027 wage negotiations.

The Inter-Company Labor Union is preparing its demands for next year, focusing on improving working conditions in the DS Division and enhancing treatment for employees in the System LSI and Foundry business units. It has demanded that the Donghaeng Union apply for separate bargaining units if it finds it difficult to fully reflect the DX Division’s demands. The Donghaeng Union claims that the DX division was marginalized in this year’s wage negotiations and is demanding the distribution of 1,000 shares of company stock per employee. The union has announced plans to hold a rally on the 21st in front of Samsung Electronics’ Seocho headquarters in Seoul to demand improvements to the compensation system.