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“I’m sorry I can’t live up to expectations.”
Executives evolved one after another,
Employees are agitated and still dissatisfied
SK Hynix CEO Lee Seok-hee posted a message on the company’s bulletin board on the 2nd, expressing his intention to “review the supplementation of the incentive system if necessary.” It is being analyzed for the purpose of appeasing SK hynix employees who are agitated by the recent “performance salary adequacy controversy.”
Through this message, President Lee expressed his “regret” over the controversy over pay for performance. President Lee said, “I feel sad that the level of pay for performance did not meet the expectations of the members.” “This year, management and members will work together to achieve good results and pay performance pay that meets expectations.” Furthermore, he explained, “if necessary, we will also review ways to improve the incentive system.”
In response to the controversy over the incentive pay on the 1st, SK Group President Choi Tae-won stated, “I will return all salary received from SK Hynix last year and share it with executives and employees.” even President Lee went to “appease the employee.”
The reason management has been quick to “evolve” is that the controversy over performance pay has rarely gone away. It started with SK Hynix’s announcement on the 28th of last month: “We will pay 400% of base salary as incentives.” It is at the “20% of annual salary” level, but it is less than half of the incentives for employees of the DS division of Samsung Electronics (47% of annual salary). SK Hynix’s operating profit last year was 5.126 billion won, which is 14 billion won less than Samsung Electronics’ DS division (18.81 billion won). However, considering the number of employees (half the number of employees) and the amount of investment in facilities which is only one third, the evaluation is predominant.
It is noted that the “opaque method of calculating incentives” also caused disappointment among employees. A fourth-year employee asked via the company notice board and email to “disclose the standards for calculating pay for performance in a transparent manner”, but the company’s human resources team said: “Distribute unconfirmed matters it’s a violation of company rules. ” Even with lower salaries and benefits than the competition, the disappointment of employees who have endured with the pride of ‘working for a global semiconductor company’ is reported to be great.
In response, President Lee explained the reason for setting the incentive pay as ‘20% of annual salary ‘last year. Although performance in 2020 has improved over 2019, it is inevitable given the ‘EVA’ (economic value added), the standard for calculating incentives. Chairman Lee said, “It was calculated by calculating 20% of the amount, excluding corporate taxes, of last year’s operating profit of 5 trillion won.” “EVA is different every year, and it is difficult for EVA to do well now due to the expansion of preventive investment.”
As rivals like Samsung Electronics are stepping up to “recruit experienced employees” one after another, concerns about the defection of SK Hynix employees are also mounting. An official from the semiconductor industry noted that “the fundamental competitiveness of high-tech industries, such as semiconductors, is talent.”
Reporter Hwang Jeong-soo [email protected]
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