For SK hynix workers, a 1,500 percent bonus simply isn't enough

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For SK hynix workers, a 1,500 percent bonus simply isn't enough

Audio report: written by reporters, read by AI


SK hynix workers pass by at the company's manufacturing site in Chengju, North Chungcheong, on July 25, 2024. [KIM SEONG-TAE]

SK hynix workers pass by at the company's manufacturing site in Chengju, North Chungcheong, on July 25, 2024. [KIM SEONG-TAE]

 
Many people might find a bonus payment of 1,500 percent of their base monthly salary hard to resist, but some employees at chipmaker SK hynix remain disgruntled over that very number.
 
They — including unionized workers — complain that the rate should be higher given the record profit last year fueled by the dominance of its major client, Nvidia, in the AI chip boom.
 

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The Icheon, Gyeonggi-based memory chip maker said in internal posting on Jan. 22 that the annual performance-based incentive rate is set at 1,500 percent, which translates into 75 percent of one’s annual salary.
 
When factoring in other bonuses the company has already paid, the bonus rate balloons to 1,920 percent.  
 
However, the chipmaker’s labor union claims the rate is the same as 2018’s, although last year’s operating profit was larger.
 
SK hynix reported an annual operating profit of 23.5 trillion won ($16.3 billion) for last year, a significant rebound from the industry downturn it faced in 2023, when it suffered an operating loss of 7.7 trillion won and offered zero performance-based bonuses.
 
In 2018, at the height of the semiconductor upcycle, it generated 20.8 trillion won in operating profit.  
 
Since the merit-based payout is sourced from up to 10 percent of the annual operating profit, nearly 32,000 hynix employees should be guaranteed a higher increase to use up the 2.3-trillion-won resource, the union argued. 
  
Kwak Noh-jung, CEO of SK hynix, sent a message to appease workers, acknowledging that the bonus level failed to satisfy them.

 
"Based on the performance, the company set the payout at 1,500 percent, the highest level ever, by reflecting past cases, an increase in personnel, the significance of achieving record-breaking performance and qualitative factors such as technological supremacy and the quality of profits,” the CEO said in the message.  
 
"I am fully aware that some may feel dissatisfied with this decision and that opinions suggest it falls short of last year's performance. Above all, it is deeply regrettable to see trust and the corporate culture, which have been built through much effort over time, being undermined," he said.
 
As impressive as the financial performance of the company may look, the nature of the semiconductor industry requires massive spending for facility investment.  
 
The Korean chipmaker flagged a higher expenditure this year as it plans for new factories in Cheongju, North Chungcheong and Yongin, Gyeonggi. 

BY PARK EUN-JEE, PARK HAE-LEE [[email protected]]
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