[Edaily Choi Oh-hyun SOYEON KIM Reporter] The tentative agreement on this year’s wage and collective bargaining agreement (CBA) between SK hynix management and labor was rejected in a vote by full-time union members. The result was extremely close, with a margin of only 25 votes between the “yes” and “no” sides. With the tentative agreement failing to clear the final hurdle, renewed negotiations between labor and management have become inevitable. Analysts suggest that union members’ dissatisfaction with a proposal to pay a portion of performance bonuses in company stock rather than cash was the deciding factor in the final vote.

According to industry sources on the 25th, the electronic vote on the tentative wage and collective bargaining agreement—conducted by the SK hynix full-time (production) workers’ union from the 24th until 9:00 a.m. that day—resulted in the agreement being rejected, with 50.08% voting against and 49.92% in favor. Out of a total of 16,083 union members, 15,045 participated, resulting in a voter turnout of 93.81%.

These results reflect the votes cast by two of the three unions at SK hynix. The union representing office and technical staff is reportedly conducting its vote until 4:00 p.m. today. These unions have each been conducting separate negotiations with management. For the tentative agreement to pass, a majority of eligible union members must participate in the vote, and a majority of those who voted must approve it. If the agreement is rejected by one of the unions, that union must resume negotiations with management.

Since the full-time union has already rejected the agreement, follow-up discussions between management and the full-time union are necessary, regardless of the outcome of the administrative and technical staff union’s vote. Management

The key point of contention in this tentative agreement is the method of distributing the Performance Share (PS)—a performance-based bonus—in the form of company stock. Previously, on the 20th, management and the union reached a tentative agreement that included a 6.3% wage increase, with 40% of the PS paid in cash and the remaining 60% in company stock. Of the shares to be distributed, 40% can be sold in the same year, while the remaining 20% will be deferred and paid out in 10% installments over two years.

Last year, SK hynix’s management and labor union agreed to maintain a system for 10 years in which 10% of operating profit would serve as the funding source and the cap on performance bonuses would be abolished. Under that agreement, 80% of the performance bonus was to be paid in cash in the current year, while the remaining 20% was to be deferred and paid in cash at a rate of 10% per year over two years.

It is reported that there is considerable dissatisfaction among employees regarding the shift to a system of paying bonuses in the form of company stock—just one year after the 10-year framework was established. It is interpreted that the rejection was influenced not only by resistance to the payment of company stock itself—particularly among employees who originally wanted to receive the full performance bonus in cash—but also by distrust that the ratio or method of stock payments could change again in the future.

Consequently, there are predictions that the process of reaching a new agreement between labor and management could be prolonged. As this reflects strong sentiment among employees in favor of full cash payment, it is highly likely that the ratio of stock awards to cash payments will once again become a key point of contention in renegotiations. This means that reaching a labor-management agreement could prove even more challenging.

The problem is that this situation could also impact the stable management of the memory supply chain—including high-value-added High Bandwidth Memory (HBM)—amid the explosive growth in demand for AI memory. Concerns are mounting that the longer the labor-management conflict over performance bonuses persists, the greater the uncertainty on the memory production floor will become.