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LG reduces $180 million in treasury stocks and introduces interim dividends for shareholders

Published: 29 Aug. 2025, 10:46

The LG logo is seen at LG Electronics' headquarters in Yeouido, western Seoul, on April 7. [YONHAP]

LG Corp, the holding company of LG Group, said Thursday it will cancel half of its treasury stock and introduce an interim dividend for the first time, in a bid to boost shareholder returns.

The company’s board approved the retirement of 3.03 million shares worth about 250 billion won ($180 million), representing half of its treasury holdings.

The cancellation, equivalent to 1.93 percent of outstanding common shares, will take effect on Sept. 4. LG said it plans to retire the remaining 3.03 million shares by next year.

The company also announced it will pay an interim dividend of 1,000 won per common and preferred share. The total payout amounts to 154.2 billion won. The record date is Sept. 12 and the payment date is Sept. 26.

Share cancellations and dividend increases are considered key shareholder-friendly measures. An LG Corp official said the company is implementing measures announced last year to raise corporate value and “strengthen investor trust.”

LG Corp also said it purchased 500 billion won worth of shares in affiliates LG Chem and LG Electronics between November 2024 and March of this year. Its stake in LG Chem increased from 30.06 percent to 31.52 percent, while its stake in LG Electronics rose from 30.47 percent to 31.76 percent. Higher stakes mean greater dividend income from affiliates, which benefits shareholders.

Shares of LG Corp gained 4.86 percent to close at 75,500 won on Thursday.

The LG logo is seen on a flag at LG Electronics' headquarters in Yeouido, western Seoul, on April 7. [YONHAP]

The company announced a shareholder return policy toward the end of last year, which included raising its dividend payout ratio floor to 60 percent of net income from 50 percent, based on separate financial statements, and adopting interim dividends.

Despite a decline in net profit, LG Corp paid out the same dividend earlier this year as last year — 3,100 won per common share and 3,150 won per preferred share. The payout ratio reached 76 percent.

The holding company aims to raise its consolidated return on equity (ROE) to 8 to 10 percent by 2027. ROE measures how efficiently a company generates profit with shareholder equity.

“LG will focus investment on high-growth areas such as ABC — AI, bio and clean tech — which the group has identified as future growth drivers, to enhance its long-term value," an LG Corp official said.

Meanwhile, the ruling Democratic Party, which passed a second amendment to the Commercial Act on Monday, has started preparing a third amendment that includes mandatory treasury stock cancellation.

Lawmakers are expected to debate the bill during the National Assembly’s regular session in September at the earliest.

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.
BY KIM KI-HWAN [[email protected]]