SK Hynix Labor and Management Finalize Wage Agreement with Record-High 95.4% Approval

SK Hynix announced on September 4 that the tentative wage negotiation agreement, which includes a 6% wage increase rate and a new performance-based pay (PS) standard, was finalized after a vote by union delegates. On September 5, representatives from both the union and management will meet to sign the wage agreement.

SK Hynix Headquarters, Icheon City, Gyeonggi Province Photo by Yonhap News

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In the union delegates' vote held that day, the agreement passed with a record-high approval rate of 95.4%. Previously, on September 1, labor and management reached a dramatic agreement in the wage negotiations and presented the tentative deal. The agreement includes abolishing the previous cap on performance-based pay, which was set at "1,000% of base salary." Instead, 10% of annual operating profit will be paid as performance-based compensation each year. Of the calculated individual performance-based pay, 80% will be paid in the current year, while the remaining 20% will be paid over two years at a rate of 10% per year. Labor and management also agreed to maintain these wage standards for the next 10 years.

Regarding the agreement, SK Hynix emphasized, "By establishing a clear and transparent standard that directly links the company's business performance with individual compensation, we have maximized intrinsic motivation for rewards through systematic management."

The company added, "By deferring a portion of the performance-based pay over two years, we have achieved a win-win effect that simultaneously pursues both the company's financial soundness and compensation stability. This is an example of both the company and its members taking a long-term growth perspective." SK Hynix further stated, "By maintaining these standards for 10 years, we have ensured the long-term sustainability of the system and built trust between the company and its employees. This fundamentally eliminates the recurring annual controversies and creates an environment where employees can focus on their work."

Industry observers are watching to see whether this labor-management agreement will boost morale among SK Hynix employees and translate into improved business performance. There is also hope that this could serve as a turning point in Korean society, where preference for medical schools over science and engineering has become widespread. Analysts believe that establishing a compensation system based on performance and achieving the best possible outcome through internal consensus could attract top science and engineering talent both domestically and internationally.

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