SK Hynix Reaches Tentative Wage Agreement,Abolishing performance Share Upper Limit
Icheon,South Korea – After a three-month standoff marked by internal conflict and a historic union meeting,SK Hynix and its labor union have reached a tentative agreement on wage negotiations.The deal, announced today, centers around a significant overhaul of the company’s performance share (PS) system and a commitment to increased compensation.The core of the agreement involves the abolition of the existing cap on performance share payouts, which previously limited incentives to 1,000% of an employee’s base salary.Under the new terms, 10% of SK Hynix’s annual operating profit will be allocated to PS payments each year, with 80% distributed immediately and the remaining 20% paid out over the following two years (10% annually).
[Image of SK Hynix Icheon Campus]
SK Hynix Icheon Campus. [Yonhap News]
This represents a major win for the union, which initially proposed an 8.25% wage increase, a higher PS distribution rate, and the complete removal of the payout limit back in May. Negotiations stalled, leading to the first union members’ conference in the institution’s history, before this breakthrough was achieved.
Key details of the agreement include:
PS System Overhaul: Elimination of the 1,000% upper limit on performance share payouts.
Profit sharing: 10% of annual operating profit dedicated to PS distribution.
Payment Schedule: 80% immediate payout, 20% distributed over two years.
Long-Term Stability: The new performance-based standards will be in effect for the next 10 years, aiming to foster internal stability.
* wage Increase: A 6.0% wage increase is also included in the agreement.
Industry analysts interpret the agreement as a strategic move by SK Hynix to enhance its competitiveness in attracting and retaining skilled semiconductor professionals. The company faces increasing pressure in a rapidly evolving global market, and bolstering employee compensation is seen as crucial to maintaining its technological edge.
The tentative agreement will now be presented to union members for ratification. Final confirmation is expected within the week. This resolution marks a significant step forward for SK Hynix, perhaps resolving internal tensions and positioning the company for continued success in the competitive semiconductor industry.
Keywords: SK Hynix, wage negotiation, performance share, PS, semiconductor industry, labor union, South Korea, compensation, operating profit, icheon, Cheongju.
