SK hynix holds first employee forum after bonus deal rejection, CEO vows to work through details

SK hynix said at its first labor-management communication event since the rejection of a tentative wage and collective bargaining agreement that it had shifted to partial stock-based payouts to ensure the long-term sustainability of its bonus system.

President and CEO Kwak Noh-jung said he would work through the finer details of the arrangement together with employees.

SK hynix held the event, titled "Together THE Communication," at its Bundang campus in Gyeonggi Province on Wednesday. It was the first such gathering since employees voted down the tentative labor-management agreement on Aug. 25.

At the event, Jin Bo-geon, the executive in charge of corporate culture, said the company would protect employees and ensure they faced no disadvantage, adding that it aimed to see their performance and compensation "recognized with pride by society."

Jin also explained the reasoning behind the shift from an all-cash bonus payout to a partial stock-based model, saying the company had considered share payouts "in light of the aligned interests of shareholders and employees — the two most important stakeholders."

Earlier, labor and management had reached a tentative agreement calling for a 6.3 percent wage increase, with 40 percent of the profit-sharing bonus — known as PS — paid in cash and the remaining 60 percent in company shares.

The deal was narrowly rejected after 50.08 percent of union members — 7,535 people — voted against it. Labor and management must now return to the negotiating table from scratch.

Kwak, who attended the event, said the two sides had reached a broad agreement last year and that he would work with employees on the details. "We reached a broad consensus last year, and I will think through the details together with our people," he said.

He also said the process was about "building a better future together and creating a sustainable company," adding that he would strive to ensure "both the company and its employees can grow with pride."

The proportion of stock-based payouts is expected to be the central sticking point in the upcoming renegotiations. The company had proposed the 60 percent share-payout ratio in the first agreement to cushion the impact of large cash outflows from bonus payments.