SK hynix has reached a tentative agreement to distribute a $1.79 billion profit pool among staff, including $50,000 bonuses per employee, after removing a 10% operating profit cap.

Following record profits driven by elevated memory prices, SK hynix encountered a dispute with its workforce over profit sharing and wage increases, raising the prospect of collective action by the company’s labor union. This week, management and the union finalized a preliminary 2026 wage and collective bargaining agreement that fundamentally alters how profit-sharing bonuses will be distributed, according to Maeil Business citing Yonhap. Under the arrangement, no strikes are currently planned at the memory maker.

The tentative package includes a 6.3% wage increase alongside enhanced company-provided welfare points. For performance-based profit distributions, employees will receive 40% in cash, with the remaining 60% issued as SK hynix shares. This structure replaces the 2025 profit-sharing framework, which allocated 10% of the prior year’s operating profit to the program and paid out entirely in cash—80% immediately and the remaining 20% over the subsequent two years.

Prior to the agreement, the union raised objections to the stock component, noting that equity-based bonuses expose workers to potential losses if SK hynix shares decline and could trigger tax complications, as income tax may be calculated using the share price when the stock is awarded. Specifically, the workers argued that performance bonuses normally paid in cash should not be converted into assets that carry investment risk. Nevertheless, management and the union have agreed to eliminate the previous 10% payout ceiling, potentially increasing total compensation, while locking in the new distribution mechanism for a decade.

Should SK hynix meet current market expectations and earn 25 trillion won ($17.897 billion) in operating profit this year, the profit-sharing pool would reach 2.5 trillion won ($1.79 billion) based on the 10% formula. With approximately 35,000 employees, the average payout would amount to 70 million won ($50,120), split into $20,048 in cash and $30,072 in stock. Actual compensation will vary depending on an employee’s position and individual performance assessment.

Tensions escalated ahead of the fifth round of negotiations on August 4, when the SK hynix union cautioned members that failure to secure a revised management proposal would make a negotiated settlement unfeasible, signaling preparations for necessary action, including a potential strike. The parties ultimately reached a compromise. The resolution arrives as Samsung Electronics navigates comparable labor disputes over worker compensation. In a related development, Samsung chip workers recently voted to accept an average bonus of $340,000, effectively ending months of strike threats. Meanwhile, SK hynix reported a 557% surge in profit amid a global memory shortage, even as expansion costs climbed to $27 billion.