SK Hynix (SKHY.US) reached an agreement with the trade union to change the profit sharing bonus to 50% cash +50% stock

The Zhitong Finance App learned that SK Hynix (SKHY.US), the world's second-largest memory chip manufacturer, has reached an agreement with the trade union to pay half of the profit sharing bonus in cash, thus resolving a dispute that could disrupt its production. SK Hynix said in a statement on Wednesday that around 57% of labor groups approved the revised wage and collective bargaining agreements. According to the latest agreement, 50% of the profit sharing bonus will be paid in cash, and the other 50% will be paid in company shares, replacing the previously proposed 40% cash and 60% stock plan. The company's stock price rose more than 2% in the Seoul market.

The agreement eased tension within the company. SK Hynix supplies Nvidia and other chip makers with high-bandwidth memory (HBM), which are key components of AI development accelerators. After about two weeks of renegotiations, the agreement was finally approved. Earlier, union members vetoed a preliminary provisional agreement in August, when 50.08% of members voted against it.

The key sticking point is management's proposal to switch a significant portion of the profit-sharing bonus from cash to shares, including restricted stocks that employees cannot sell immediately. The union initially objected to the proposal, believing it would disrupt the profit-sharing framework agreed last year.

According to last year's framework, SK Hynix agreed to lift the upper limit of the profit sharing bonus and distribute 10% of the annual operating profit to employees within 10 years. According to estimates, the company's annual bonus per employee is expected to reach 779 million won (approximately $547,000) in 2026. As the booming semiconductor industry generates record profits, the scale and structure of such bonuses has become a matter of close attention not only for SK Hynix and its employees, but for the whole of Korea.

The two sides also agreed that if SK Hynix loses money, employees will temporarily delay receiving 3% of their wages, and once the business improves, full payment of wages will resume.