Seoul, Feb 18 – Samsung Electronics has announced its decision to cancel treasury stocks worth 3 trillion won ($2.01 billion) as part of its broader share buyback plan aimed at enhancing shareholder returns. The company disclosed in a regulatory filing that 50.1 million common stocks and 6.9 million preferred shares will be retired, reinforcing its commitment to supporting stock prices and investor confidence.
A Strategic Move to Strengthen Stock Performance
The cancellation follows a decision made by Samsung’s board in November 2023, approving a 10 trillion won share repurchase program over a year. As a first step, the company had planned to buy back and cancel 3 trillion won worth of shares within three months, a move now set into action.
Reducing the number of outstanding shares is expected to directly impact earnings per share (EPS), making the stock more attractive to investors. By shrinking the supply, companies often see increased demand, which in turn supports or boosts stock prices. This is a widely used financial strategy by major corporations looking to increase shareholder value without issuing direct cash payouts.
Samsung Chairman Tops South Korea’s Dividend Earners
Meanwhile, Samsung Electronics Chairman Lee Jae-yong emerged as South Korea’s highest dividend recipient in 2024, according to data from corporate tracker Leaders Index. The report examined 560 companies that distributed cash dividends last year, revealing that Lee received a staggering 346.5 billion won ($239.8 million)—a 7.1% increase from the previous year.
Other top recipients of corporate dividends in South Korea include:
- Chung Mong-koo, Hyundai Motor Group’s honorary chairman, with 189.2 billion won ($131.1 million).
- Euisun Chung, Hyundai Motor’s executive chairman, earning 174.7 billion won ($121.1 million).
- Chey Tae-won, SK Group chairman, ranked seventh with 91 billion won ($62.9 million) in annual dividends.
Dividend Trends Across Major South Korean Corporations
The survey found that 285 companies increased their dividends in 2024, while 94 companies maintained their previous levels, and 181 firms reduced them. Notably, SK hynix, a major SK Group subsidiary specializing in semiconductor manufacturing, nearly doubled its dividend payout. The company benefited significantly from the surging demand for AI-related chips, which helped it report record earnings in 2023.
A breakdown of South Korea’s total corporate dividend distribution:
| Year | Total Dividends Paid (Trillion Won) | Yearly Growth (%) |
|---|---|---|
| 2023 | 36.9 | — |
| 2024 | 40.7 | 10.4% |
This 10.4% increase in total dividend payouts underscores a strong corporate earnings season despite global economic uncertainties.
What’s Next for Samsung Investors?
The stock cancellation aligns with broader market expectations that Samsung will continue its shareholder-friendly policies. In a market where tech giants are under pressure to return value to investors, Samsung’s move signals confidence in its long-term financial health.
With the semiconductor industry rebounding and AI chip demand surging, Samsung’s earnings outlook appears promising. Investors will be closely watching how these financial strategies translate into stock market performance in the coming months.
