Shareholder group rallies for higher Samsung dividends amid expected 100 trillion won plan
The group is demanding that the technology giant, riding high on the AI chip boom, cancel treasury shares instead of funneling them into employee bonuses.
Min Kyung-kwon, head of the Korea Shareholders Movement Headquarters, reads a statement during a press conference outside the Gyeonggi Nambu Provincial Police Agency in Suwon, Gyeonggi, on Aug. 19.YONHAP
A shareholders' advocacy group will hold a rally on Friday calling on Samsung Electronics to cancel an employee bonus agreement and deliver greater returns for shareholders.
The rally, held by the Korea Shareholders Movement Headquarters, will take place near Gangnam Station in southern Seoul.
The demands come amid anticipated record earnings on the back of the AI chip boom. Samsung is expected to post 380 trillion won ($275 billion) in operating profit this year, while annual free cash flow (FCF)is estimated at about 263 trillion won.
“Performance bonuses constitute an ex-post distribution of management results, and paying a certain percentage of operating profit as bonuses without a resolution at a general meeting of shareholders is an unlawful disposition of profit,” the Korea Shareholders Movement Headquarters said at a press conference in front of the Gyeonggi Nambu Provincial Police Agency in Suwon, Gyeonggi, on Wednesday.
“Treasury shares are assets that a company acquires with distributable profits and should then be canceled to return value to all shareholders. It is self-contradictory for a company to hand treasury shares that should be returned to shareholders to a specific group and put them back on the market.”
Citing dividend plans and expanded share buybacks by U.S. semiconductor companies such as Nvidia, Qualcomm and Micron, the group is demanding that Samsung return more than half of its current cash holdings and more than half of its FCF generated in the second half of this year to shareholders.
The Samsung Electronics flag flies in front of the company's Seocho office in southern Seoul on July 30.YONHAP
“Samsung Electronics generates world-class profits, yet its shareholder return ratio falls short of even half the global standard,” said Min Kyung-Kwon, the head of the shareholder group. “That also runs counter to the duty under the revised Commercial Act requiring directors to protect shareholders’ interests.”
Separately, Japan’s Nikkei newspaper reported that Samsung will hold a board meeting Friday and announce a shareholder return plan worth $72 billion. The report noted that rival SK hynix had already unveiled a 40 trillion won share buyback plan, and suggested Samsung was poised to unveil what would be the largest shareholder return program in Korean corporate history, amid growing pressure from investors seeking stronger returns.
Samsung also hopes the plan will help lift a share price that has come under pressure over concerns about the scale of its AI-related spending, according to Nikkei. The paper noted that Samsung had decided to pay employees performance bonuses worth about 600 million won per person this year, but had not carried out share buybacks or raised dividends.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
