The agenda items included approval of the full-year financial statement, election of members to the Board of Directors and amendments to the articles of incorporation for a stock split, which was announced earlier this year.

“Samsung Electronics had an outstanding year in 2017 as we achieved record results despite an uncertain business environment,” Oh-Hyun Kwon, Chairman of the Board of Directors, said in his opening remarks. “In 2018, we are committed to delivering another successful year by taking on new challenges and building the foundation for mid- to long-term sustainable growth.”

Enhancing Shareholder Value

In 2017, the Company returned 9.2 trillion won to shareholders through share buybacks and cancellation and plans to pay out a total of 5.8 trillion won in annual dividends. In addition, the Company cancelled half of its treasury shares in 2017.

As announced earlier, the Company will focus on delivering shareholder value by increasing dividends for 2018 to 2020. The planned 50 to 1 stock split is expected to improve the accessibility and liquidity of the shares.

“We also established the Governance Committee, comprised entirely of independent directors, to address all matters that can have a material impact on shareholder value,” said Chairman Kwon.

Election of New Directors

The Company’s Board of Directors proposed the appointments of three new independent directors and four executive directors, following last year’s leadership changes.

Upon shareholders’ approval, President and former Chief Financial Officer Sang-Hoon Lee will be elected to the Board and take the role of Board Chairman, succeeding Chairman Kwon. This will mark the first time Samsung Electronics will separate the Chairman of the Board and the Chief Executive Officer roles.

“The separation will further empower the Board of Directors and enhance its independence,” said Chairman Kwon. “The Board will be able to evaluate the Company’s performance more objectively and have greater authority and efficiency as a decision making body.”

The heads of the Company’s three divisions — Presidents Kinam Kim (Device Solutions), Hyunsuk Kim (Consumer Electronics), and Dongjin Koh (IT & Mobile Communications) — were also nominated to join the Board. Meanwhile, the Board’s Independent Director Recommendation Committee has nominated three new candidates for election, including Dr. Jeong Hun Kim, Dr. Sun Uk Kim and Dr. Byung Gook Park.

Following their elections, the number of the Company’s Board members will increase to eleven from nine.

“I believe this is the right time for a younger leadership to take the helm of the Company to better respond to a rapidly changing global IT industry,” said Chairman Kwon. “I sincerely hope that our shareholders will continue to show unwavering interest and support our new management team.”

The strong balance sheet and the increase in cash holdings of the Company have reduced the need to hold treasury shares, which the Company had retained to use as a financial resource, including for M&A transactions and securing talented professionals.

More importantly, today’s decision reflects Samsung’s ongoing commitment to enhancing sustainable long-term value for shareholders.

As the current market value of the treasury shares exceeds 40 trillion won, the Company plans to cancel the shares in two stages to limit the impact on the financial market. The first stage will cancel 50 percent of the holding, or about 9 million common shares and about 1.6 million preferred shares, and the remainder will be canceled after the Board’s approval in 2018.

The Company currently holds 17,981,686 of common shares (12.9 percent of outstanding common stock) and 3,229,693 of preferred shares (15.9 percent of outstanding preferred stock) in treasury shareholding.

There is one more thing. The company announced a buyback program in November 2014. As of January 26, 2015, Samsung Electronics has so far completed share repurchase of 1.65 million common shares and 250,000 preferred shares for KRW 2.45 trillion.

Despite the fact that Samsung Electronics’ net income and free cash flow decreased year-on-year by approximately KRW 7 trillion and KRW 10 trillion, respectively, in 2014, the company returned a total of KRW 5.4 trillion to shareholders, which is 2.5 times greater compared to 2013.

Such measures are part of Samsung Electronics’ efforts to enhance shareholder value by increasing shareholder return, despite a decline in earnings and the weak Korean stock market in 2014. Against this backdrop, Samsung Electronics enhanced its competitiveness through CAPEX and R&D investments, and also focused on implementing more shareholder-friendly policies during 2014.

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