South Korean listed firms’ rewards for shareholders are extremely low compared to rivals in the United States, Canada and Japan, according to data compiled by Samsung Securities released on Thursday.
U.S. companies in the S&P 500 index spent an average of 55 percent of their net profit on stock buybacks from 2008-2013, and their dividend payout ratio - the percentage of earnings a company gives to shareholders in the form of dividends - stood at an average of 40 percent.
The data indicate that the S&P firms spent almost all of their profit in rewarding shareholders through stock buybacks and dividend payouts. Compared to their peers in other nations, South Korean firms have been less eager to reward shareholders.
The data comes after the country’s new finance minister vowed a wide range of steps to push local companies to increase dividend payouts, blaming them for holding onto too much cash, which is prolonging the sluggish domestic demand