SK hynix Faces Test Over 60% of Performance Bonus in Treasury Shares as Union Vote on Wage Deal Outcome Draws Attention

[Financial News] The union at SK hynix has begun voting on whether to approve a provisional agreement for this year's wage and collective bargaining deal, centered on a plan to pay 60% of the performance bonus in treasury shares. About six hours after voting began, more than 65% of union members had cast ballots. However, opposition remains over revising the bonus system agreed to last year just one year later, drawing attention to the final outcome.
According to the industry on the 24th, the production workers' unions at SK hynix's Icheon and Cheongju sites began voting at 6 a.m. on the provisional agreement for the 2026 wage and collective bargaining deal. The vote is being conducted through mobile electronic voting and will end at 9 a.m. on the 25th. As of noon that day, the turnout among eligible union members had exceeded 65%. With the turnout surpassing a majority in just about six hours, the result is being seen as reflecting strong interest in the provisional agreement. The technical and office workers' union is also expected to complete a separate vote later this week.
Because each union negotiated separately with management, voting and approval are also being carried out independently. If the agreement is rejected, the union concerned will have to hold additional talks with management and draw up a new proposal.
The core of the provisional labor-management agreement is to pay 40% of the profit-sharing bonus, or PS, in cash and the remaining 60% in treasury shares. Of the shares to be distributed, 40% can be sold in the same year, while the remaining 20% will be deferred and paid in installments of 10% a year over the next two years. For the 2026 PS to be paid early next year, however, workers were given the option to receive the 40% share portion that can be sold in the same year as cash. As a result, up to 80% of next year's payout can be received in cash.
Measures were also included to reduce the burden from stock price fluctuations. When calculating the number of shares to be distributed, SK hynix decided to apply the lowest closing price among three reference dates: the annual preliminary earnings announcement date, the PS cash payment date, and the stock payment date. This is seen as a step to ease the burden of a reduced share payout caused by stock price swings, by basing the calculation on a relatively lower share price.
The agreement is drawing attention because it revises the bonus system established just one year ago. Last year, SK hynix and its union agreed to abolish the cap on PS payments, which are funded by 10% of operating profit, and to maintain that bonus system for 10 years. Under the previous system, 10% of operating profit was also used as the PS fund, but a payment cap of up to 1,000% of base salary applied. Under that agreement, 80% of PS was to be paid in cash in the same year, while the remaining 20% would be deferred and paid in cash in two installments of 10% each over two years. If the new provisional agreement is approved, a system that pays 60% of PS in treasury shares will be introduced, changing the bonus structure.
That is why some observers say it is difficult to be optimistic about final approval. Some union members are reportedly unhappy that the bonus system agreed to last year for long-term maintenance is being changed again. In particular, because the provisional agreement includes a plan to pay 60% of PS in treasury shares, resistance is emerging among members who prefer cash payouts. Another factor is that the actual value of the compensation could change depending on future stock price movements.
There is precedent for a provisional wage and collective bargaining agreement failing to clear the union vote. SK hynix's union rejected provisional agreements in 2023 and 2024, forcing renewed negotiations with management.
[email protected] Im Subin Reporter