Samsung Electronics names 3 new CEOs
W29 tril. dividends to be paid between 2018 and 2020
Samsung Electronics changed all three CEOs of its key businesses Tuesday, carrying out a major generational shift at the top executive level.
The electronics giant held a meeting of its board of directors and named three presidents — Kim Ki-nam, Kim Hyun-seok and Koh Dong-jin — as the new heads of its semiconductor, consumer electronics and mobile businesses, respectively.
Besides Vice Chairman Kwon Oh-hyun, who announced his imminent retirement earlier this month, Presidents Yoon Boo-keun and Shin Jong-kyun also decided to depart from their CEO positions at the consumer electronics and mobile businesses.
“We carried out the executive reshuffle as we couldn’t delay it any longer with the three CEOs leaving their posts,” the company said in a statement. “The three new CEOs have accumulated extensive experience in their areas and thus are well-qualified. The company expects the reshuffle will vitalize the company and help it effectively deal with the uncertain business environment.”
Samsung said Yoon and Shin will leave the company in March next year, one year earlier than their given terms’ end. The company also said it will continue to be run jointly by the three new CEOs without major restructuring.
Samsung Electronics President and Chief Financial Officer Lee Sang-hoon also decided to step down. Unlike Yoon and Shin, however, the company said it will appoint Lee as the chairman of the company’s board of directors.
On Tuesday, the board also revealed its dividend plan for the next three years and pledged to give 9.6 trillion won ($8.56 billion) to shareholders as dividends every year from 2018 to 2020. This is double the 4.8 trillion won this year. Samsung paid 3.1 trillion won and 4 trillion won as dividends in 2015 and 2016, respectively.
In the plan, the company vowed to continue paying 50 percent of its free cash flow as dividends.
“We have focused on allowing the shareholders to better project how much dividends the company will pay,” it said.
Earlier that day, the company said, “The plan to pay about 29 trillion won of dividends in the next three years as we determined that our expected performance and financial conditions will be able to handle it. Even if we have problems in business between 2018 and 2020 and have insufficient free cash flow, we will still pay the promised dividends.”
Samsung said it will also buy back about 900,000 shares over the next three months as another part of its plan to boost shareholder value. Earlier in January, the company said it would repurchase its treasury stocks worth 9.3 trillion won throughout this year.
Tuesday’s meeting of the board of directors also confirmed its earnings results in the third quarter.
In its regulatory filing, the company posted a record operating profit of 14.53 trillion won, up 179 percent from the previous year, boosted by a strong performance in the chip business.
The tech giant’s sales reached 62.05 trillion won, up 29.7 percent from a year ago and net profit amounted to 11.1 trillion won.
Samsung attributed the record-breaking figures to the strong performance in the semiconductor sector where it also chalked up an all-time high of 9.96 trillion won in profit amid a memory chip “super cycle.”
Its chip division posted an operating profit of 8.03 trillion won in the April-to-June period and 6.31 trillion won in the first quarter.