SK hynix labor, management clash over proposed bonus overhaul

SK hynix's labor unions and management are locked in a standoff over the chipmaker's profit-sharing bonus system, as the company seeks to revise the payout structure just one year after agreeing to keep it unchanged for a decade.

SK hynix's production-line union held intensive working-level talks with management Tuesday at the Jincheon Chamber of Commerce and Industry in North Chungcheong, according to industry sources Wednesday. The company's office and technical workers' union held separate talks the same day. The sessions followed a third round of main negotiations on July 14, where the two sides failed to narrow their differences over bonuses and other key proposals.

Management is reported to have presented a new bonus payout plan during the main negotiations. The details haven't been disclosed publicly, but the proposal reportedly includes paying part of the bonus in company stock rather than cash.

The production line union pushed back, calling the proposal a violation of the intent and basic direction of last year's hard-won bonus agreement and saying it cannot accept the plan. The office and technical workers' union also said it cannot accept any change to bonus criteria that would put employees at a disadvantage.

In a recent internal Q. and A., the unions described the company's initial proposal as "shockingly outrageous." It specifically opposed paying part of the bonus in stock and argued that the company's actual proposal is lower than what has been publicly reported.

In last year's negotiations, SK hynix's labor and management agreed to eliminate the cap on the company's profit-sharing bonus, funded by 10 percent of operating profit, and to keep that structure locked in place for the next decade. Under the current system, 80 percent of the bonus is paid in cash the same year, with the remaining 20 percent deferred over two years.

If the current bonus structure remains in place, SK hynix's operating profit is projected to reach about 270 trillion won ($182 million) this year, which would significantly increase the size of the bonus pool. A calculation based on 10 percent of operating profit divided among the company's roughly 35,000 employees puts the average bonus at about 700 million to 800 million won per employee before taxes, though actual payouts will vary by rank and individual criteria.

With the bonus pool expected to grow sharply, the prospect of a change to how it's paid out has raised concern among employees. Industry observers say the company's push for a new bonus structure reflects pressure from public scrutiny and the cash outflow tied to strong earnings, along with a strategy to tie employee compensation to long-term corporate value.

Housing support has also emerged as a major agenda item in the welfare portion of the talks. After Samsung Electronics introduced a company housing-stability loan program of up to 500 million won in this year's wage negotiations, SK hynix's union is reportedly in talks with management over a similar housing loan support program funded through the company's employee welfare fund.

The union said that given the heightened outside attention following the removal of the bonus cap, it built its demands around expanded welfare benefits rather than a large wage increase, focusing on items such as cash-equivalent welfare points, pension and shift allowances that offer meaningful improvements to actual working conditions.

SK hynix operates under a multiunion structure, with a Korean Confederation of Trade Unions-affiliated technical and office workers' union and a Federation of Korean Trade Unions-affiliated production union each conducting separate wage negotiations. The two sides are expected to hold a fourth round of main negotiations soon to continue talks.

In September 2025, SK hynix's union and management reached a deal after roughly three months of negotiations, scrapping the previous 1,000 percent base salary cap on the company's profit-sharing bonus and tying it instead directly to 10 percent of annual operating profit, with both sides agreeing to keep the structure in place for a decade. The deal drew wide attention and prompted unions at other major Korean firms, including Samsung Electronics and Hyundai Motor, to push for similar profit-linked structures.

BY JEONG JAE-HONG [[email protected]]