SK Hynix to Pay Majority of 2026 Employee Bonuses in Company Stock

SK Hynix has reached a tentative wage agreement with its South Korean workers that will see employees receive at least 60% of this year’s performance bonuses in company stock, marking a major shift from the all-cash payouts made last year.

The agreement comes as the artificial intelligence boom continues to drive strong demand for SK Hynix’s advanced memory chips, pushing the company’s earnings higher and resulting in exceptionally large bonuses for employees. According to Reuters calculations, workers are expected to receive an average of 779 million won, or about $547,000, in bonuses for 2026.

Under the proposed deal, employees will receive 40% of their bonuses in cash and another 40% in company shares that can be converted to cash immediately. The remaining 20% will be paid as deferred stock compensation, with half becoming available after one year and the balance after two years.

The agreement also includes a 6.3% increase in base wages. However, it contains a provision allowing SK Hynix to defer up to 3% of wages if the company records losses.

The deal is still subject to approval by union members. It follows concerns among some workers over the volatility of SK Hynix’s share price, despite the company’s strong gains from the global AI boom.

SK Hynix said the agreement represents a breakthrough reached directly between labour and management without external mediation.

The announcement came a day after the company unveiled plans to buy back and cancel 40 trillion won ($28.6 billion) worth of treasury shares and allocate more than half of its free cash flow generated between 2025 and 2027 to shareholder returns. The news helped push SK Hynix shares up 13% on Thursday.

The proposed bonus structure reflects SK Hynix’s effort to balance rising employee rewards with cash management, while giving workers a greater stake in the company’s long-term performance.