Hynix SK discontinues wage cap for bonus payments in agreement
SK Hynix Announces Major Wage Agreement with Union
After months of negotiations, SK Hynix has reached a significant agreement with its labor union, marking a new chapter in the company's history. The deal, which aims to establish a more performance-driven culture, will see employees potentially receiving substantial performance-related payouts.
The performance-based compensation system, set to last for the next 10 years, aligns employee rewards with the company's actual earnings. This system is intended to reward high performers and boost motivation, moving towards a more meritocratic system within SK Hynix.
The agreement includes a 6% base salary increase and a total performance bonus pool of around 3.7 trillion won ($26.5 billion), based on the estimated operating profit of approximately 37 trillion won for this year. Each employee could potentially receive an average of 100 million won in performance-related payouts.
80% of each employee's individual bonus will be paid within the current year, while the remaining 20% will be deferred and disbursed in two equal annual installments. The existing cap on profit-sharing bonuses has been removed, further incentivizing employees to contribute to the company's success.
The union initially demanded an 8.25 percent wage increase, a higher base salary ceiling, and a greater share in profits, including the elimination of existing caps on bonuses. Despite initial disagreements, particularly over bonus-related clauses, the revised proposal received overwhelming support from union delegates, passing with a record 95.4 percent approval rate.
The changes are not only aimed at reinforcing a performance-driven culture within SK Hynix but also at resolving recurring disputes over compensation and cultivating a long-term foundation of trust and stability. The agreement demonstrates SK Hynix's commitment to inclusive growth within the semiconductor ecosystem, further strengthening ties with partner firms.
The company's new compensation structure is perceived as a step towards a more transparent and equitable system, sharing its success with employees and fostering a sense of unity and collaboration. A formal signing ceremony is scheduled to take place on Friday.
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