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SK hynix strikes deal with workers on wage increase, bonus cap removal

Published: 04 Sep. 2025, 16:41 Updated: 04 Sep. 2025, 17:18

SK hynix's headquarters in Icheon, Gyeonggi is seen on Jan. 23. [YONHAP]

After a three-month standoff, SK hynix's labor and management have reached a wage agreement, with the key terms including a 6 percent wage increase and the removal of the cap on performance-based bonuses.

Going forward, 10 percent of the company’s annual operating profit will be distributed entirely as bonuses to employees.

The tentative agreement was approved in a union representative vote, concluding the wage negotiations, according to SK hynix on Thursday. A signing ceremony is scheduled for Friday.

Based on the new agreement, each SK hynix employee is expected to receive approximately 100 million won ($71,790) in bonuses this year.

Previously, the company and union had clashed over the cap on performance-based bonuses. SK hynix had a policy of allocating 10 percent of its operating profit as a bonus pool, with a cap of 50 percent of annual salary or 1,000 percent of the base pay.

The union argued that the full 10 percent should be distributed to employees with no cap, whereas management insisted that any remaining profit should be allocated toward facility and future technology investments.

The impasse led to the first-ever full-scale union protest in the company’s history last month.

A highest-capacity, high-bandwidth 16-High HBM3E memory chip from SK hynix is seen in this studio photograph [REUTERS/YONHAP]

Ultimately, management accepted the union’s demand, agreeing to remove the cap. Under the new system, 80 percent of each individual’s bonus will be paid within the year, while the remaining 20 percent will be distributed over the following two years at 10 percent per year.

This new policy will remain in effect for the next 10 years. The agreement passed with a record-high approval rate of 95.4 percent.

“This agreement clearly and transparently establishes a link between company performance and individual compensation,” said SK hynix. “It will also motivate employees to boost company performance and strengthen compensation for high performers, helping to attract top-tier science and engineering talent globally.”

The agreement is also affecting the broader industry. On Tuesday, the Super-enterprise Union of Samsung Group — representing labor unions from five Samsung affiliates — sent a formal letter to Samsung Electronics Executive Chairman Lee Jae-yong requesting improvements to the company’s bonus system.

“While SK hynix has agreed to pay 10 percent of operating profit as bonuses through labor negotiations, Samsung Electronics continues to use an unclear Economic Value Added method for its bonus system,” the union argued.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK HAE-LEE [[email protected]]