A person familiar with the matter revealed that South Korean chip giant SK hynix (SKHY.US) has reached a preliminary salary agreement, planning to distribute 60% of this year's employee bonuses in company stock and the remaining 40% in cash. The source, who requested anonymity as they were not authorized to speak to the media, noted that the relevant agreement is currently being discussed by union representatives.

Last year, SK hynix had signed a ten-year deal with its employees, promising to share 10% of annual operating profits in cash. However, this year, management proposed converting more than half of the bonuses into stock with a restricted selling period, a move that has drawn opposition from some employees who harbor concerns over the volatility of the company's share price. SK hynix declined to comment on the matter.

Riding the wave of the artificial intelligence (AI) boom, SK hynix has seen a sharp rise in performance, and employee bonuses have followed suit. Estimates suggest that by 2026, the average bonus per employee could reach 779 million KRW (approximately 547,000 USD).

According to the source, under the latest proposal, employees will receive stock equivalent to 40% of the total bonus in 2027, with the remaining 20% deferred to 2028 and 2029, and this portion will not be subject to any lock-up period. The other 40% of the bonus will be paid out in cash as a lump sum in 2027.

Additionally, SK hynix announced on Wednesday that it will buy back and cancel treasury shares worth 40 trillion KRW (approximately 28.6 billion USD) and will allocate more than 50% of free cash flow generated between 2025 and 2027 to enhance shareholder returns. Buoyed by this news, the company's share price surged 13% on Thursday.