[Edaily Reporter SOYEON KIM ] SK hynix’s wage and collective bargaining negotiations for this year have returned to square one following the rejection of a tentative agreement. The agreement, which was reached after approximately two months of negotiations between management and the union, was rejected in a vote by full-time union members, with the margin between “yes” and “no” votes amounting to just 25 votes. Amid record-breaking earnings driven by surging demand for artificial intelligence (AI) memory, labor-management conflict over the method of paying performance bonuses continues.
According to industry sources on the 25th, the electronic vote on the tentative agreement for wage and collective bargaining—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 it. The approval rate stood at 49.92% (7,510 votes), with the margin between “yes” and “no” votes amounting to just 25 votes. Out of the total 16,083 union members (in Icheon and Cheongju), 15,045 participated in the vote, resulting in a turnout rate of 93.81%.
However, in the vote by the clerical and technical staff union, the tentative agreement was approved with 66% in favor. Since the full-time union and the clerical and technical staff union conducted separate negotiations, the full-time union and management will now engage in additional negotiations. SK hynix stated, “Further consultation between labor and management is necessary regarding the next steps.” The Technical and Administrative Staff Union, with approximately 900 members, is one-eighteenth the size of the Full-Time Staff Union (16,083 members).
The key point of contention in this tentative agreement is the method of distributing the Profit Sharing (PS)—a performance-based bonus—in the form of company stock. Previously, on the 20th, management and the union reached a tentative agreement to pay 40% of the PS in cash and the remaining 60% in company stock. Of the company stock, 40% can be sold during the relevant fiscal year, while the remaining 20% will be deferred and paid out in 10% installments over two years.
Analysts believe that union members’ dissatisfaction with the proposal to pay a portion of the performance-based bonus in company stock rather than cash ultimately swayed the final vote.
Last year, SK hynix management and the union agreed to maintain a performance bonus system for 10 years, funded by 10% of operating profit and eliminating the PS cap. Under that agreement, 80% of the PS was to be paid in cash in the same 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 change—just one year after the performance-based bonus system was agreed to be maintained for 10 years—to a structure where a portion of the cash payment is converted into company stock. Analysts suggest that distrust over the possibility that the ratio or method of company stock payments could change again at any time also influenced the voting results.
The results of this vote are interpreted as showing that employees’ demand for cash performance bonuses remains strong. Consequently, it is highly likely that reducing the proportion of stock awards and increasing the share of cash payments will emerge as key issues in renegotiations. However, given that the ratio of “yes” to “no” votes was nearly even, some believe that renegotiations could proceed smoothly.
With the surge in demand for AI memory increasing the importance of stable production and supply chain management, there are concerns that a prolonged labor-management conflict over performance bonuses could impact the company’s competitiveness.
