Loading…
Samsung Electronics is planning a 90 trillion won ($58.61 billion) share buyback to fund a stock bonus for chip division workers, according to reports from Yonhap News Agency. Source: The Next Web, CNA
The buyback is tied to a pay deal reached with the union last month, setting aside about 10.5% of operating profit for bonuses in the form of shares. Source: The Next Web The total bonus cost is estimated at 154 trillion won including taxes. Source: CNA Employees can sell a third immediately, another third after a year, and the rest after two years. Source: The Next Web
The massive buyback also addresses pressure from investors over the "Korea discount", as South Korean conglomerates face demands for better shareholder returns. Source: The Next Web Meanwhile, Samsung's memory business has been boosted by AI demand, but rival SK Hynix has overtaken it as Korea's most valuable listed company. Source: The Next Web
The plan is subject to board approval, expected as early as July. Source: The Next Web Until then, the 90 trillion won figure remains a report rather than a commitment.
“The buyback is less a vote of confidence in the share price than a bill coming due. It exists to supply the stock Samsung now owes its own workers.”
“Management and union last month reached a pay deal under which Samsung is expected to set aside about 10.5 per cent of its operating profit for special bonuses for the chip division in the form of stocks”
“Samsung will need to buy back the treasury stock to hand out, which is what the 90 trillion won is for.”