Chairman Lee Jae-yong not nominated for board amid legal uncertainties
Samsung Electronics said Tuesday it would cancel 3.05 trillion won ($2.11 billion) worth of its own previously purchased shares as part of its plan to boost shareholder value.
The tech giant’s board of directors met Tuesday and approved the retirement of 50.1 million common stocks and 6.91 million preferred stocks. The cancellation is set to take place Thursday.
In addition, Samsung also decided to acquire an additional 3 trillion won in treasury shares between Feb. 18 and May 16 to enhance shareholder value. As part of the plan, it will purchase 48.15 million common shares worth 2.7 trillion won and 6.63 million preferred shares worth 303.6 billion won.
Of them, approximately 500 billion won will be allocated as compensation for employees, and the remaining 2.5 trillion won will be used to stabilize the stock price and improve shareholder value, the firm said in a regulatory filing.
The latest announcement is part of the company’s decision in November 2024 to buy back shares worth 10 trillion won over a one-year period. The move was aimed at tackling the electronic giant’s faltering stock prices as it struggles to catch up with rivals in the critical AI chip race.
It remains to be seen whether Samsung’s buyback and share cancellation will significantly impact stock prices. After the firm announced its repurchase scheme in November, shares increased just 4.67 percent over three months, from 53,500 won to 56,000 won as of Monday. On Tuesday, Samsung’s shares closed at 56,900 won, up 1.61 percent from the previous day.
Also on Tuesday, Chairman Lee Jae-yong's name was excluded from the list of board of director nominees, indicating that ongoing legal uncertainties continue to cloud his return.
The company's upcoming shareholder meeting is slated for March 19, and there had been speculation that Lee could be reinstated this year, five years after his last board stint from 2016 to 2019.
The decision not to include Lee comes after prosecutors appealed against the recent appellate court's acquittal of Lee regarding charges of stock manipulation and accounting fraud concerning a 2015 merger of two Samsung affiliates.
Meanwhile, Samsung nominated Vice Chairman Jun Young-hyun, who heads the firm’s chip business, and CTO Song Jai-hyuk to join its board as new internal directors.
Additionally, it has nominated a chip expert Lee Hyuk-jae, a professor of electrical and computer engineering at Seoul National University, as a new outside director. Lee, who holds a doctorate in engineering from Purdue University, heads the SNU’s semiconductor research center. With Lee's addition, three chip experts are expected on the board, as the tech giant seeks to regain competitiveness in its struggling chip business.
Several current board members are also up for reappointment including Roh Tae-moon, president and head of mobile division, Kim Jun-sung, CIO of the National University of Singapore, Heo Eun-nyeong, engineering professor at the Seoul National University and Yoo Myung-hee, former trade minister of South Korea.
If all nominations are approved, Samsung’s board will expand from nine to ten members, with four internal directors and six external directors.
sahn@heraldcorp.com
