Global Market: SK Hynix unveils stock-based bonus plan for South Korean workers

SK Hynix has reached a tentative wage agreement with its South Korean workforce that would shift a significant portion of employee bonuses from cash into company shares, as the chipmaker seeks to balance soaring payouts driven by the artificial intelligence boom with the need to preserve cash, Reuters reported.

Under the proposed agreement, employees would receive 40% of their bonuses in cash and another 40% in SK Hynix shares that could be sold immediately. The remaining 20% would be distributed as deferred stock compensation, with half becoming available after one year and the remainder after two years.

According to Reuters calculations, SK Hynix workers are on course to receive average compensation of about 779 million won ($547,000) in 2026, reflecting the sharp increase in the company's profitability as demand for high-bandwidth memory and other AI-related chips accelerates.


The agreement still requires approval from union members, an SK Hynix spokesperson said.

The proposed structure represents a significant shift from last year's arrangement, under which SK Hynix agreed to distribute 10% of its annual operating profit to employees in cash. That agreement was designed to remain in place for a decade.

Some workers had opposed the move toward stock-based compensation over concerns about volatility in SK Hynix shares. The stock reached a record high in June amid enthusiasm over AI-related demand but later came under pressure as investors questioned whether increased spending would generate sufficient returns.

The tentative deal also includes a 6.3% increase in base wages. It allows SK Hynix to defer up to 3% of wages in years when the company records losses, giving it additional flexibility during weaker business conditions.

SK Hynix said the agreement was reached directly between management and labor without external mediation.

The company's strong financial position has also allowed it to increase shareholder returns. SK Hynix announced on Wednesday that it would repurchase and cancel 40 trillion won ($28.6 billion) worth of treasury shares and allocate more than 50% of its free cash flow generated between 2025 and 2027 toward shareholder returns.

The announcement helped drive SK Hynix shares sharply higher, with the stock gaining 13% on Thursday.

The combination of higher employee compensation, expanded shareholder returns and strong AI-driven earnings highlights the growing financial benefits of the semiconductor boom for SK Hynix, while also increasing pressure on the company to manage its cash resources carefully.