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LG Corp. to cancel treasury shares worth 250 billion won by 2026

Published: 28 Nov. 2025, 17:29 Updated: 01 Dec. 2025, 13:30

A flag with the LG logo flies in front of LG Electronics' headquarters in Yeouido, western Seoul, on April 7. [YONHAP]

LG Corp. said on Friday it will cancel all of its remaining treasury shares worth 250 billion won ($168 million) by mid-2026 and accelerate shareholder returns across LG Group as part of a broader effort to lift its valuation.

The holding company said in a disclosure that it will retire 3,029,581 treasury shares by the first half of next year after scrapping an equal amount in September, when it eliminated half of the roughly 500 billion won in stock it had bought back.

Canceling treasury shares is one of the main shareholder return tools alongside dividends. Retiring shares reduces the number of outstanding shares and lifts earnings per share.

LG Corp. said it lifted its minimum payout ratio to 60 percent from 50 percent and delivered a payout ratio of 76 percent last year based on adjusted stand-alone net profit. The company also entrenched a twice-a-year dividend after paying a 1,000 won interim dividend per common and preferred share in September, totaling 154.2 billion won.

The company said it plans to use after-tax proceeds of about 400 billion won from the sale of its Gwanghwamun building in central Seoul to expand investment in AI, biotech and clean technologies, which Chairman Koo Kwang-mo has identified as key growth drivers. Part of the funds may be used flexibly for shareholder returns, the firm said.

LG Corp. kept its target of achieving an 8 to 10 percent return on equity by 2027 and will set up a board-level compensation committee to strengthen oversight of executive pay.

Other LG Group affiliates also outlined their plans. LG Electronics said it will return 200 billion won to shareholders over the next two years and aims to cancel all of its treasury shares — 1,749 common shares and 4,693 preferred shares — pending approval at next year’s annual general meeting.

Electronic component manufacturer LG Innotek plans to raise its dividend policy from paying at least 10 percent of consolidated net profit to 20 percent by 2030. Mobile carrier LG U+ said it is working toward a midterm target of lifting its shareholder return ratio to as high as 60 percent.

The liberal Democratic Party is pursuing an amendment to the Commercial Act that would require companies to cancel treasury shares acquired within a year and obtain annual shareholder approval for disposal plans.

Business groups warn that mandatory cancellations could weaken takeover defenses and leave companies more exposed to hostile bids.

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 NA SANG-HYEON [[email protected]]