SK hynix to Hold Second Vote on Wage Deal; Will Revised Proposal With Higher Cash Payments Pass?

[Financial News] SK hynix’s tentative wage and collective bargaining agreement for this year, which was rejected by just 25 votes, has been put to a second vote after its payment terms were revised. With labor and management increasing the cash portion of excess profit-sharing payments (PS) and expanding employees’ options for receiving company shares, attention is focused on whether the agreement will secure a majority and be finalized.
According to industry sources on the 15th, SK hynix’s labor union began voting on the wage and collective bargaining agreement that day. Members will vote on the revised tentative agreement until 9 a.m. on the 16th. Before the vote, the union also held briefing sessions on the revised proposal for delegates and members from the 10th through the weekend.
The key change in the revised proposal concerns how excess profit-sharing payments (PS) will be distributed. The basic ratio has been adjusted from “40% in cash and 60% in shares” to “50% in cash and 50% in shares.” In particular, employees’ choice of shares has been expanded from a fixed 50% to a range of up to 100%, selectable in 10-percentage-point increments.
Payments calculated based on last year’s performance that had been deferred until next year and the year after will also be paid early. The measure is intended to minimize confusion that could arise from changing the performance-bonus payment system.
In addition, a supplementary measure has reportedly been introduced under which PS will be paid entirely in cash, without stock payments or deferrals, in years when it falls below 1,000% of base pay. Even if the company records a loss, existing deferred payments will be guaranteed. Related costs will also be reflected back in operating profit so that a decline in operating profit caused by PS payments does not reduce the funding available for the next performance bonus.
SK hynix had previously reached a tentative agreement under which 40% of PS would be paid in cash and 60% in company shares. The union then held a vote on the tentative wage and collective bargaining agreement, but it was rejected. The technical-office workers’ union approved the agreement with 66% support, while the production workers’ union rejected it by a margin of just 25 votes, with 7,535 votes against and 7,510 in favor.
Because the first vote was extremely close and the revised proposal increases the cash portion and expands employees’ options, the industry generally expects it to pass. However, some members still demand that all PS be paid in cash, making the final voting sentiment a key variable. An industry source said, “The first vote was decided by an extremely narrow margin, and some of the points requested by employees have been reflected this time, so the chances of passage appear to have increased.” The source added, “However, some employees still want the entire amount paid in cash, so we will have to watch the voting results until the end.”
If the revised proposal is approved, labor and management are expected to sign a final agreement and conclude this year’s wage and collective bargaining negotiations. If it is rejected again, however, further negotiations over the performance-bonus payment system will be unavoidable, potentially delaying the conclusion of the agreement until after the Chuseok holiday.
[email protected] Im Soo-bin Reporter