Labor union and management of SK hynix Inc. have settled their wage negotiation for this year, ahead of the usual second half.

The second largest chip maker in South Korea reached an agreement with production workers under the Federation of Korean Trade Unions on Monday and with technical officers belonging to the Korean Confederation of Trade Unions on Tuesday, industry sources said Wednesday.

They have agreed on a plan to increase basic salary of technical officers by 8.07 percent on average, which would make the annual salary of new entrants joining the company in January at 50.4 million won ($45,206). They will also receive 2.5 million won in incentive for rapid settlement of the wage deal, 5.1 million won in production incentive (200 percent of the base salary) and 1.6 million won worth welfare points.

The management also proposed a plan to give a 1,000 percent of the base salary, or about 50 percent of annual salary, as an incentive called profit sharing (PS) if the company achieves higher earnings than the previous year. The company raked in 5.1 trillion won in operating profit and 31.9 trillion won in revenue in 2020, up 85 percent and 18.2 percent on year respectively.

The production workers have agreed on the same 8.07 percent raise of base salary, which would translate into around 5 million won increase in annual salary when including benefits and incentives. The company has reached a wage agreement earlier than normal because the management fully agreed on the higher-than-usual pay raise as it prioritizes human capital, said an official from the company.

By Lee Jong-hyuk, Park Jae-young and Choi Mira

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