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SK hynix will pay staff $50,000 apiece according to a tentative agreement with disgruntled workers — $1.79 billion potential profit pool will be split between cash and stock grants
After posting record profits amid high memory prices, SK hynix ran into a dispute with employees over profit sharing and wage increases, which threatened to escalate into collective action by the company's union. This week, SK hynix management and the labor union reached a preliminary 2026 wage and collective bargaining agreement that significantly changes how the company's profit-sharing bonuses will be distributed, reports Maeil Business citing Yonhap. The good news is that no strikes are planned at the memory maker.
The tentative labor package reportedly calls for a 6.3% wage increase and an increase in welfare points provided by the company. In addition, under the proposed arrangement, employees will receive 40% of their performance-based profit distribution in cash, while the remaining 60% will come in the form of SK hynix shares. The proposal changes SK hynix's 2025 profit-sharing scheme, which allocated 10% of the previous year's operating profit to employee profit-sharing program, but the bonus was to be paid complete in cash: employees received 80% in cash immediately and remaining 20% over the next two years.
The union argued that stock-based bonuses expose employees to potential losses if SK hynix shares decline and could create tax complications, as income tax may be calculated using the share price when the stock is awarded. Specifically, the workers argued that performance bonuses normally paid in cash should not be converted into assets that carry investment risk. Yet, the SK hynix management and union have agreed to remove the 10% ceiling, potentially providing more money to employees, maintain the mechanism for 10 years, and pay the bonuses in cash and stock.
If SK hynix meets current market expectations and earns 25 trillion won ($17.897 billion) in operating profit this year, the profit-sharing pool would amount to 2.5 trillion won ($1.79 billion) based on the 10% formula. SK hynix reportedly has approximately 35,000 employees, so on average every employee will get 70 million won, or $50,120 ($20,048 in cash and $30,072 in stock). Yet, actual compensation will differ depending on an employee's position and individual performance assessment.
On August 4, before the fifth round of negotiations, an SK hynix union told members that if management did not present a revised proposal, it would be difficult to settle the dispute through negotiations alone and the union would have to take necessary action, which was obviously a way to threaten the management with a strike. Yet, the parties have come to terms.
The dispute comes as Samsung Electronics has faced similar labor action over compensations.
Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
