SK hynix labor unions to vote on stock-based profit sharing agreement

SK hynix management and labor unions have reached a tentative agreement regarding the 2026 wage and collective bargaining terms, which includes a significant shift in how profit-sharing bonuses (PS) are distributed. Under the proposal, 40% of the PS will be paid in cash, while 60% will be provided in company stock. Of the stock portion, 40% can be sold immediately, and the remaining 20% will be deferred over two years.

To mitigate risks associated with stock price volatility, the company will determine the number of shares based on the lowest closing price among three specific dates: the performance announcement date, the cash PS payment date, and the stock payment date. For the initial 2026 distribution, employees will have the option to receive the 40% stock portion in cash, potentially allowing for up to 80% cash compensation.

The agreement also sets a wage increase rate of 6.3%, slightly higher than the 6.2% recently agreed upon by Samsung Electronics. While the company views this as a way to align the interests of employees and shareholders, some employees have expressed concerns regarding the change from cash to stock and how potential losses from stock price drops might be compensated.

Union members for both production and office workers are scheduled to vote on the agreement this week. A successful vote requires a majority of both the total members and those participating in the vote.