SK hynix's 60% Stock-Grant Bonus Plan Stalled by 25 Votes; Renegotiation Also Faces Rough Road

[Financial News] A tentative wage and collective bargaining agreement reached by SK hynix management and labor after two months of negotiations was rejected by production workers' union members by just 25 votes. As the dispute reportedly centered on a plan to pay 60% of performance bonuses in company stock, further friction is expected in future talks over the balance between cash and stock-based compensation.
According to industry sources on the 25th, the production workers' union at SK hynix said the tentative agreement, which closed at 9 a.m. that day, was rejected after 50.08% of members, or 7,535 people, voted against it in an electronic ballot. Turnout reached 93.81%, with 15,045 of the union's 16,038 members in Icheon and Cheongju taking part. Although more than half of eligible members voted, the proposal was defeated because a majority of voters opposed it. Support stood at 49.92%, or 7,510 votes, meaning the margin was only 25 votes.
By contrast, the technical and office workers' union approved the tentative wage agreement reached earlier by labor and management in a vote held that afternoon. However, since the production workers' union had already rejected the deal, the company and the union are expected to move on to follow-up talks while watching the next steps in the process.
The tentative deal reportedly drew backlash, especially from members who prefer cash, because it included a plan to pay 60% of PS in company stock. Dissatisfaction over revising the bonus system, which was set only a year ago, also appears to have played a role. Another concern was that the actual value of the compensation could change depending on future stock price movements. An industry official said, "With turnout above 90% and opinions split down the middle, it may take time for labor and management to come up with a new compromise that can win members' support."
Meanwhile, on the same day, Hyundai Motor Company and its labor union finalized a tentative agreement in this year's wage negotiations. The result came after the 17th round of talks, which ran overnight on the 24th and 25th at the Ulsan Plant. If the agreement passes a union vote on the 31st, the wage negotiations will be completed 111 days after the first meeting on May 6. The base monthly salary will rise by 100,000 won. In addition, performance pay will be set at 400% plus 12.7 million won. The package also includes 15 shares of stock, a 500,000-won increase in welfare points, and a 200,000-won increase in summer vacation allowance.
[email protected] Lim Subin Kim Dongchan Reporter