SK Hynix Bonus Dispute Deepens as Union Rejects Stock-Based Payout Proposal

SK Hynix and representatives of one of its South Korean labor unions resumed negotiations on Tuesday, holding a fifth round of talks over the semiconductor company's employee bonus structure at its Cheongju manufacturing complex.

The discussions come as both sides remain divided over changes to SK Hynix's highly lucrative profit-sharing program. Under an agreement reached last year, the memory chipmaker committed to distributing 10% of its annual operating profit to employees. Based on Reuters calculations, the 2026 payout could average about 779 million won ($547,127) per worker, reflecting the company's strong financial performance.

According to a note sent by the union to its members and reviewed by Reuters, SK Hynix management has proposed paying more than half of future bonuses in company shares instead of cash. The proposal would also limit when employees could sell those shares. In addition, the company is seeking changes that would adjust bonus payments during years when SK Hynix reports financial losses.

The union strongly opposed the proposal, arguing that employees should not shoulder the risks associated with fluctuations in the company's stock price. It stated that it would "absolutely not accept" any compensation structure that exposes workers to share-price volatility.

Union representatives also warned that if management failed to present a "concrete and forward-looking revised proposal" during Tuesday's negotiations, reaching an agreement through dialogue alone would become increasingly unlikely. The union added that it would take "necessary action" if progress is not made, signaling the possibility of escalating labor measures.

An SK Hynix spokesperson declined to comment on the ongoing negotiations, while union representatives were not immediately available for additional remarks.

The dispute comes during a volatile period for SK Hynix shares. Although the stock has surged more than 130% since the beginning of the year, it has also lost nearly half of its value since reaching a record high in June. The sharp swings have intensified concerns among union members about tying a significant portion of their compensation to the company's share performance.

The outcome of the negotiations could have broader implications for employee compensation policies at South Korea's leading semiconductor manufacturers as the industry continues to navigate strong profits alongside heightened market volatility.