Union at SK Hynix (SKHY.US) Rejects Stock Bonus Plan, Labor Negotiations Deadlocked

According to Jinse Finance APP, reports indicate that the SK Hynix (SKHY.US) labor union has rejected the preliminary wage agreement reached with management last week, with 50.08% of union members voting against it. The union has also rejected similar preliminary agreements in previous years, and it is expected that labor and management will restart negotiations.

The rejected agreement included: a 6.3% increase in base salary, and employee performance bonuses to be distributed as 40% cash and 60% company stock. Some employees expressed dissatisfaction with this arrangement, with the main concern being the high volatility of the company’s stock price—since the peak in June, SK Hynix’s stock price has fallen by approximately 45%.

Impacted by this news, during Tuesday morning’s Seoul trading session, SK Hynix’s stock price dropped as much as 6.8%, dragging the Korea Composite Stock Price Index (KOSPI) down by over 4%. Samsung Electronics also fell by more than 4%. Investors are weighing the risks of escalating Middle East geopolitical tensions while awaiting US economic data and corporate earnings reports to be released this week, resulting in overall cautious market sentiment.

The deeper background to this labor dispute is the internal contest over wealth distribution triggered by the global AI spending boom. As a key supplier of high-bandwidth memory (HBM) required for AI systems, SK Hynix has recently seen a substantial increase in profits, but management and employees have been unable to reach consensus on how to share this “AI dividend”.

It is worth noting that SK Hynix signed a ten-year long-term incentive agreement with its employees last year, promising to share 10% of the annual operating profit in cash. In comparison, last week’s stock payment plan is seen as more closely binding employee earnings to stock price fluctuations. It is estimated that in 2026, the average employee bonus at the company could reach 779 million won (approximately $547,000).