Samsung C&T announces new shareholder return policy

Samsung C&T’s Board of Directors on February 26 approved a series of measures aimed at enhancing shareholder value and corporate governance:

  1. – New shareholder return policy (FY20-FY22 dividend policy, treasury share cancellation)
  2. – Measures to facilitate board-centric governance
    1. ① Appointment of 3 independent director candidates
    2. ② Strengthening of role and status of Governance Committee
    3. ③ Introduction of Lead Independent Director system
    4. ④ Appointment of additional Shareholder Advocates
  3. – Implementation of e-voting at Annual General Meeting (AGM)

New 3-year (FY20-FY22) dividend policy & treasury share cancellation

The new three-year dividend policy seeks to further enhance shareholder value, redistributing dividend income from shares in affiliates such as Samsung Electronics to improve predictability and the payout amount.

While the previous dividend-per-share (DPS) of KRW 2,000 is equivalent to the Company paying out 60% of the annual dividend income it receives from affiliate share assets, the new dividend policy enables this redistribution ratio to be adjusted to up to 70 percent each year, thereby allowing the Company to maintain a gradual increase in dividends regardless of changes in the amount of dividend income it receives.

Additionally, the Company will cancel 2.8 million treasury shares, worth approximately KRW 300bn in market value, in an effort to further enhance shareholder value.

Appointment of independent director candidates

To strengthen the expertise and independence of the Board of Directors, the Company has appointed the following three independent director candidates:

Janice Lee is a finance/risk management expert who has held C-level positions in numerous global companies in a range of industries including finance, telecommunications, and machinery. The board believes her inclusion will contribute to enhancing the Company’s value by adding expertise and diversity to the board.

Byung-Suk Chung is a former Vice Minister of Labor and labor policy expert who has shared his insight on corporate governance with the Company since 2015 as an external expert to the Governance Committee. The board believes his inclusion will contribute to upgrading the CSR management, particularly in the areas of human rights and labor.

Sang-Seung Yi is an expert on fair trade, corporate governance, and economic policies who has shared insight on corporate governance strategies with the Company since 2015 as an external expert to the Governance Committee. The board believes his inclusion will contribute to enhancing the Company’s corporate governance structure and the transparency of its businesses.

Consolidated Governance Committee, Lead Independent Director system, and additional Shareholder Advocate

The Board’s CSR Committee has been merged into the Governance Committee, which in turn has been promoted from advisory to board committee level. The consolidated Governance Committee will provide oversight on non-financial (ESG) performance relevant to corporate sustainability.

The board has also approved the introduction of the Lead Independent Director system, where the Lead Independent Director, as the representative of independent directors, will ① convene/host independent director meetings, ② assist the efficient operation of independent directors, and ③ engage in internal and external communication activities. The Lead Independent Director will be selected following March’s AGM, and will serve concurrently as the head of the Governance Committee.

The Company currently appoints at least one independent director as Shareholder Advocate to engage in communication with shareholders and the market. In January 2020, the Company appointed an additional Shareholder Advocate, Independent Director Philippe Cochet, to bolster communication with shareholders outside Korea.

Implementation of e-voting

Meanwhile, starting from this year’s AGM, the Company will adopt an e-voting system which will allow shareholders to participate and exercise their voting rights without physically attending the event.

Samsung C&T will continue to work toward realizing board-centric corporate governance, based on which it will seek to provide greater value to shareholders and strengthen communication with stakeholders.

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