Capital ideas

31 Oct 2017 By Robyn Mak Follow @mak_robyn

The tech giant is raising dividends to at least $26 bln through 2020. A tweaked returns policy also gives Samsung’s three fresh CEOs-in-waiting and newly separate chairman room to hand back even more. That would help keep outside investors onside for an eventual restructuring.

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Samsung Electronics on Oct. 31 named three new executives to lead its components, mobile and consumer electronics divisions, effectively immediately. Lee Sang-hoon will resign as chief financial officer and has been recommended as chairman of the board.

It is the first time Samsung will separate the chairman and chief executive roles. Kim Ki-nam, 59, was appointed to lead Device Solutions, which makes components including memory chips; Koh Dong-jin, 56, is to head up IT and Mobile Communications; and Kim Hyun-suk, 56, has been tapped to run Consumer Electronics.

Samsung said it intends to keep its existing co-CEO structure. The trio of new executives need shareholder approval to join the board first before they can be appointed CEOs.

Earlier on Oct. 31, Samsung said it would pay 29 trillion won ($25.9 billion) of dividends for 2018 to 2020, as part of the company's shareholder return plan for the next three years.

Samsung will allocate at least 50 percent of free cash flow to shareholder returns over the three years. On top of the planned dividends, any remaining portion will be used for either additional dividends or share buybacks "as deemed appropriate", the company added.

The management changes follow the resignation of CEO and Vice Chairman Kwon Oh-hyun, who announced his retirement on Oct. 13 when his board term ends next year.

The surprise resignation came as Kwon was expected to take a bigger role following the arrest of de facto leader Jay Y. Lee in February and the departures of other key executives in the wake of a corruption and bribery scandal.

Context News

Samsung said it intends to keep its existing co-CEO structure. The trio of new executives need shareholder approval to join the board first before they can be appointed CEOs.

Earlier on Oct. 31, Samsung said it would pay 29 trillion won ($25.9 billion) of dividends for 2018 to 2020, as part of the company's shareholder return plan for the next three years.

The management changes follow the resignation of CEO and Vice Chairman Kwon Oh-hyun, who announced his retirement on Oct. 13 when his board term ends next year.

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