SK Hynix (SKHY.US) "sky-high bonus" distribution plan preliminarily confirmed: 60% in shares, 40% in cash, with an average per capita bonus expected to reach 779 million KRW

According to Golden Ten Data, SK Hynix (SKHY.US), South Korea's chip giant, has reached a preliminary wage agreement to issue 60% of employees' bonuses this year in company stock, with the remaining 40% paid in cash, according to a person familiar with the matter. The agreement is currently being discussed by union representatives, and the source, who was not authorized to speak to the media, requested anonymity.

Last year, SK Hynix struck a ten-year agreement with its employees, committing to share 10% of the annual operating profit in cash. However, this year, management proposed to convert more than half of the bonuses to stock, restricting sales for a certain period. This proposal has triggered opposition from some employees who are concerned about the volatility of the company’s share price. SK Hynix declined to comment on the matter.

Benefiting from the artificial intelligence (AI) boom, SK Hynix's performance has surged, and employee bonuses have soared. Estimates suggest that by 2026, the average employee bonus could reach 779 million Korean won (approximately $547,000).

The source further noted that under the latest plan, employees will receive 40% of their bonus as stock in 2027, while the remaining 20% will be deferred to 2028 and 2029, with this portion of stock free from sales restrictions. The remaining 40% of the bonus will be paid out in cash in one lump sum in 2027.

Additionally, SK Hynix announced on Wednesday that it will repurchase and cancel treasury shares worth 40 trillion Korean won (about $28.6 billion), and will use over 50% of free cash flow generated from 2025 to 2027 to enhance shareholder returns. Boosted by this news, the company's stock price surged 13% on Thursday.