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Samsung Electronics’ Seocho office building in Seoul. (Photo: Yonhap News) |
[Alpha Biz= Kim Jisun] SEOUL, Oct. 16 — Samsung Electronics has clarified to employees that its newly introduced Performance Share Unit (PSU) program is not intended to avoid mandatory share cancellations under Korea’s revised Commercial Act. The company emphasized that the majority of the treasury shares it has repurchased over the past year are scheduled for cancellation.
According to industry sources, Samsung issued an internal notice on Wednesday to dispel rumors that the PSU system was designed as a tool to bypass share retirement obligations. The company stated that such claims are “factually incorrect.”
Samsung explained that between November 2023 and September 2024, it repurchased a total of 10 trillion won worth of treasury shares to enhance shareholder value. Of this, 8.4 trillion won worth of shares were allocated for cancellation, and 1.6 trillion won were earmarked for employee compensation, a breakdown that was already disclosed in prior regulatory filings.
The company added that it has already canceled 3 trillion won worth of shares and plans to retire the remaining 5.4 trillion won worth at an appropriate time.
Meanwhile, the 1.6 trillion won portion reserved for employee rewards is being used to fund employee stock grants (30 shares each) and Over-Profit Incentive (OPI) stock bonuses. These shares are expected to be fully utilized by 2027. Because PSU-based share distributions will take place after 2028, Samsung said it will need to repurchase additional shares in the future.
On October 14, Samsung announced the introduction of the PSU program, under which employees will receive company shares based on stock price performance over the next three years. The program aims to motivate employees to focus on long-term value creation.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
