Samsung Electronics unveiled a shareholder return plan worth KRW 90 trillion to KRW 110 trillion, the largest ever by a Korean company. Yet among shareholders, disappointment erupted before any celebration, and on the first trading day after the announcement the stock plunged as much as 8% intraday. There was another oddity. On the day of the announcement, the common shares fell in after-hours trading while the preferred shares, Samsung Electronics Pref., jumped more than 8%. Break down what makes up the KRW 110 trillion, and the reasons for all of these reactions become clear.<\/p>\n\n\n\n
The KRW 90 trillion to KRW 110 trillion announced this time is not a single, confirmed sum. It splits into three pieces.<\/p>\n\n\n\n
The confirmed money is KRW 30 trillion. It will be paid as a cash dividend in the third quarter of this year, and because it far exceeds the regular annual dividend of about KRW 9.8 trillion, it effectively includes a special dividend. The details will be finalized at a board meeting in late October.<\/p>\n\n\n\n
The undecided money is KRW 60 trillion to KRW 80 trillion. This portion, two-thirds of the total, has no set method or size: it could be paid as dividends or used to buy back and cancel shares. The decision has been pushed to a board meeting next January, when this year’s earnings are finalized.<\/p>\n\n\n\n
Separately, a KRW 15 trillion share buyback was approved, but it is for employee stock compensation, not shareholder returns. That money does not go back to shareholders.<\/p>\n\n\n\n
In short, of the KRW 110 trillion, the only confirmed share for shareholders right now is the KRW 30 trillion dividend; the rest is closer to a preview. That structure is where shareholder disappointment starts.<\/p>\n\n\n\n
First, it was smaller than expected. Before the announcement, brokerages floated forecasts as high as KRW 200 trillion, and on that expectation the stock surged more than 13% in the two days before the announcement. KRW 110 trillion is a lot of money, but it fell short of the expectations already priced into the stock.<\/p>\n\n\n\n
Second, only the dividend was confirmed, and the share cancellation shareholders wanted most was left out. There was a KRW 15 trillion buyback, but since it is for employee compensation, it does nothing for shareholder value.<\/p>\n\n\n\n
Third, the comparison was unflattering. Two days earlier, SK hynix announced it would buy back and cancel shares with the entire KRW 40 trillion, and raised its return target from up to 50% of free cash flow to at least 50%. Samsung Electronics kept its existing 50% standard. Full cancellation versus a confirmed KRW 30 trillion dividend: that contrast split the two companies’ share prices.<\/p>\n\n\n\n
Because the same amount of money leaves shareholders with different value.<\/p>\n\n\n\n
A dividend is one-time cash. The moment you receive it, 15.4% is withheld as dividend income tax, and the share price typically drops by about that amount on the ex-dividend date.<\/p>\n\n\n\n
Cancellation means the company buys its own shares and retires them. Because the number of shares outstanding shrinks permanently, earnings per share rise even if profits stay the same, and that is a direct basis for a higher share price. There is no tax, and the effect keeps accumulating. That is why cancellation beats dividends for long-term shareholders.<\/p>\n\n\n\n
It is not just a lack of will; there is a structural constraint. The reason is the Financial Industry Structure Improvement Act.<\/p>\n\n\n\n
Under the act, Samsung Life Insurance and Samsung Fire & Marine Insurance can together hold no more than 10% of Samsung Electronics, and their combined stake in the common shares is already near that limit. A stake is the number of shares held divided by the total shares issued, so if Samsung Electronics cancels common shares and shrinks the total share count, the two insurers’ stake rises on its own, without their buying a single share, and breaches the limit. In fact, ahead of a share cancellation this past March, the two companies had to hastily sell about KRW 1.5 trillion worth of shares in block deals. The more common shares are canceled on a large scale, the more the financial affiliates have to keep selling.<\/p>\n\n\n\n
\u2605 Financial Industry Structure Improvement Act: A law that bars financial companies such as insurers from holding more than a set percentage of shares in non-financial affiliates. It is meant to keep risk from spreading when industrial and financial capital become entangled.<\/p>\n\n\n\n
This explains the strange price moves on the day of the announcement. The limit under the act is interpreted based on voting common shares, so non-voting preferred shares are free from this rule. Brokerages therefore see a strong chance that future buybacks and cancellations will focus on preferred shares rather than common shares. As that expectation was priced in, only Samsung Electronics Pref. jumped more than 8% on the day of the announcement.<\/p>\n\n\n\n
Then, from a common shareholder’s point of view, are returns focused on preferred shares a gain? Only half a gain.<\/p>\n\n\n\n
Dividends are not a problem. Dividends are paid on both common and preferred shares, so common shareholders get the full benefit of the KRW 30 trillion dividend.<\/p>\n\n\n\n
The problem is cancellation. Canceling preferred shares still reduces the total share count, which improves per-share value across the company. Fewer shares splitting the dividend pool also benefits common shareholders. But the buying demand and price support created when the company purchases shares in the market go to the preferred shares it is buying. The company is not buying the common shares you hold. In other words, common shareholders get only the indirect effect while preferred shareholders take the direct effect, and the opposite moves of the common and preferred shares on the day of the announcement show this difference exactly.<\/p>\n\n\n\n
That is hard to say for certain. The KRW 30 trillion dividend is a confirmed item scheduled for payment, and the KRW 110 trillion total was calculated under the existing policy of returning 50% of free cash flow; it was not inflated.<\/p>\n\n\n\n
Still, the disappointment has grounds. The KRW 110 trillion headline was put up front, but only KRW 30 trillion is confirmed, the remaining two-thirds has been pushed to next year, and the market’s key demands, cancellation and a higher return target, went unanswered.<\/p>\n\n\n\n
The verdict comes next January. How much of the remaining KRW 60 trillion to KRW 80 trillion goes to cancellation, and whether it goes to common or preferred shares, will decide the true nature of this announcement. Brokerages, factoring in the act’s constraints, estimate about KRW 10 trillion to KRW 20 trillion in cancellations and KRW 50 trillion to KRW 60 trillion in dividends, but these figures have not been confirmed by the company.<\/p>\n\n\n\n
BITPRESS Insight<\/p>\n\n\n\n
There are three takeaways from this episode. First, look at the makeup of a shareholder return announcement, not the total. Of the KRW 110 trillion, the only confirmed share for shareholders was the KRW 30 trillion dividend, and the market reacted to exactly that makeup. Second, even for the same company, the return method decides whether common or preferred shares come out ahead. Samsung Electronics, where the act could push cancellations toward preferred shares, is a prime example, and the preferred shares jumping alone on announcement day was the market’s answer. Third, the final verdict on this announcement is not in yet. The points to check are the dividend details in late October and the size of cancellations next January, especially how they are split between common and preferred shares.<\/p>\n\n\n\n
Sources \uc0bc\uc131\uc804\uc790\uac00 \uad6d\ub0b4 \uae30\uc5c5 \uc0ac\uc0c1 \ucd5c\ub300\uc778 90\uc870\uc5d0\uc11c 110\uc870 \uc6d0 \uaddc\ubaa8\uc758 \uc8fc\uc8fc\ud658\uc6d0 \uacc4\ud68d\uc744 \ub0b4\ub1a8\uc2b5\ub2c8\ub2e4. \uadf8\ub7f0\ub370 \uc815\uc791 \uc8fc\uc8fc\ub4e4 \uc0ac\uc774\uc5d0\uc11c\ub294 \ud658\uc601\ubcf4\ub2e4 \uc2e4\ub9dd\uc774 \uba3c\uc800 \ud130\uc838 \ub098\uc654\uace0, \ubc1c\ud45c \ud6c4 \uccab \uac70\ub798\uc77c \uc8fc\uac00\ub294 \uc7a5\uc911 8%\ub300\uae4c\uc9c0 \uae09\ub77d\ud588\uc2b5\ub2c8\ub2e4. \uc774\uc0c1\ud55c \uc810\uc740 \ub610 \uc788\uc2b5\ub2c8\ub2e4. \ubc1c\ud45c \ub2f9\uc77c \ubcf4\ud1b5\uc8fc\ub294 \uc2dc\uac04\uc678\uc5d0\uc11c \ud558\ub77d\ud588\ub294\ub370 \uc6b0\uc120\uc8fc\uc778 \uc0bc\uc131\uc804\uc790\uc6b0\ub294 8% \ub118\uac8c \uae09\ub4f1\ud588\uc2b5\ub2c8\ub2e4. 110\uc870\ub77c\ub294 \ub3c8\uc758 \uad6c\uc131\uc744 \ub72f\uc5b4\ubcf4\uba74 \uc774 \ubaa8\ub4e0 \ubc18\uc751\uc758 \uc774\uc720\uac00 \ubcf4\uc785\ub2c8\ub2e4. \uc774\ubc88\uc5d0 \ubc1c\ud45c\ub41c 90\uc870\uc5d0\uc11c […]<\/p>\n","protected":false},"author":1,"featured_media":1489,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"bitpress_en_title":"","bitpress_en_desc":"","footnotes":""},"categories":[24,223],"tags":[404,774,206,773,289,294,434],"class_list":["post-1487","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-it-business","category-korea-stocks","tag-sk","tag-774","tag-206","tag-773","tag-289","tag-294","tag-434"],"acf":[],"yoast_head":"\n
https:\/\/www.hankyung.com\/article\/2026082156601<\/a>
https:\/\/www.tfmedia.co.kr\/news\/article.html?no=206632<\/a>
https:\/\/www.viva100.com\/article\/20260824500235<\/a>
https:\/\/www.hankyung.com\/article\/2026082154366<\/a>
https:\/\/www.mt.co.kr\/industry\/2026\/08\/21\/2026082117430659590<\/a>
https:\/\/www.sisajournal.com\/news\/articleView.html?idxno=384512<\/a>
https:\/\/www.sedaily.com\/article\/20082389<\/a><\/p>","protected":false},"excerpt":{"rendered":"