Samsung Electronics held a board meeting on Tuesday and announced that it has decided to retire 50,144,628 common shares and 6,912,036 preferred shares purchased from November 20 of last year to February 13 of this year. The estimated total amount for the buyback is approximately KRW 3.5 trillion ($2.4 billion).
This decision aligns with Samsung Electronics’s plan announced last November to repurchase and retire KRW 10 trillion ($7 billion) worth of its own shares over a year.
Additionally, from February 19 to May 16, the board of directors decided to acquire 48,149,247 common shares (valued at approximately KRW 2.7 trillion) and 6,636,988 preferred shares (valued at approximately KRW 303.6 billion).
Samsung explained that of the KRW 3 trillion ($2.07 billion) worth of shares it plans to buy back by May, around KRW 500 billion ($346 million) will be used for employee stock-based compensation, while the remaining KRW 2.5 trillion ($1.7 billion) will stabilize the stock price and enhance shareholder value.
Last month, Samsung Electronics announced it would pay its executives and executives overall performance incentives (OPI) in company stock. OPI is paid up to 50% of an individual’s annual salary, capped at 20% of the excess profits, when the performance of the individual’s business unit exceeds the goal set at the beginning of the year.
Executives must receive a portion of their incentives in company stock based on their rank: 50% or more for managing directors, 70%ore more for vice presidents, 80% or more for presidents, and 100% for registered executives.
The shares will be distributed in January of next year, and those receiving shares below the vice president level cannot sell them for one year, while the president level cannot sell for two years. According to the payment agreements, managing directors and vice presidents face a two-year restriction on selling, while presidents have a three-year restriction. If the stock price as of January next year matches or exceeds the price at the time of the agreement, employees will be able to receive the agreed-upon number of shares. However, if the stock price declines, the number of shares to be received will decrease proportionally.