Frustrated minority shareholders of Samsung Electronics are mobilizing to call an extraordinary general meeting, citing the company’s weak stock performance and a desire for higher shareholder returns.
They seek greater returns.
Shareholder platform seeks signatures for extraordinary meeting
The activist group Act has started collecting electronic signatures to meet the 3 percent stake threshold required under Korean law. Sources say the platform is courting the National Pension Service and both domestic and foreign asset managers to reach the roughly 202 million shares needed out of about 6.74 billion shares outstanding.
If successful, the meeting would propose a share buyback of 45.5 trillion won (about $31.9 billion), a revision of the operating‑profit‑linked employee bonus system, and greater disclosure of how shareholder return decisions are made.
Controversy over semiconductor bonus program
The dispute centers on a new bonus pool for semiconductor staff, set at 10.5 percent of operating profit, with after‑tax bonuses paid in company shares. Minority investors argue that automatically linking bonuses to earnings earmarks future profits before the board can evaluate capital‑allocation priorities or the firm’s financial health.
They also claim that paying bonuses entirely in treasury shares weakens the effect of share cancellations and forces Samsung to repurchase additional shares with cash.
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Act has highlighted that 95 percent of participants rejected the policy in an emergency vote held in May. The platform subsequently asked the board to convene an extraordinary meeting, sought court access to the shareholder register, and urged the National Pension Service to back requirements for shareholder approval of large compensation plans.
This move represents a step up in activism at Samsung, shifting from letters and proposals at annual meetings to a direct attempt to shape corporate capital allocation.
Samsung reported preliminary second‑quarter revenue of 171 trillion won ($117.3 billion) and operating profit of 89.4 trillion won, with first‑quarter operating profit at 57.2 trillion won. Despite strong earnings, the company’s share price has fallen sharply, prompting calls for faster returns.
Under its 2024‑2026 shareholder‑return policy, Samsung aims to return 50 percent of free cash flow, including annual dividends of 9.8 trillion won and additional returns if excess capital remains. The firm disclosed cash dividends of 20.9 trillion won and share repurchases worth 8.4 trillion won for cancellation during 2024 and 2025.
Achieving the legal threshold will be difficult. Foreign investors hold about 47 percent of common shares, while domestic institutions own roughly 15 percent, meaning broad participation from individual shareholders is essential.
