South Korea’s SK Hynix union members reject wage agreement in vote

Members of the SK Hynix labor union have narrowly rejected a tentative wage agreement, with the outcome decided by a slim margin of just 25 votes. The vote, held on August 25, saw 50.08% of the 15,045 participating workers cast ballots against the proposed deal.

The agreement had aimed to provide a 6.3% wage increase. A significant point of contention was the revision to the company's profit-sharing bonus scheme. Under the new proposal, 40% of these bonuses would be paid in cash, while the remaining 60% would be issued in SK Hynix company shares. This contrasts with the previous year's agreement, which set aside 10% of annual operating profit for bonuses, with 80% paid in cash and 20% deferred over two years.

Concerns over the volatility of SK Hynix's stock price appear to be a primary driver for the workers' rejection. Despite the company's strong profits, fueled by demand for AI-related high-bandwidth memory chips, the stock has experienced fluctuations. Employees expressed apprehension about receiving a larger portion of their bonuses in shares, particularly after the stock's record high in June was followed by a slump. This situation echoes a similar negotiation at Samsung Electronics earlier this year, where a deal on performance pay was reached, averting a strike.