Samsung Electronics Co. shareholders on Friday approved the company’s 50-to-1 stock split plan, allowing more investors to own the bellwether stocks. The company aims to list new shares on May 4 after three-day suspension in trading existing stocks, according to the plan.
Shares of Samsung Electronics ended Friday down 3.98 percent at 2,486,000 won ($2,297.17).
The company in January announced a plan of dividing one share to 50, shaving its face value from 5,000 won to 100 won to make its share more accessible and affordable. As the shareholders have approved the plan, the company will suspend trading of its shares for three days - Apr 30, May 2 and 3 - and list new shares on May 4.
After the stock split, the number of common shares will increase to 6,419,324,700 issues from 128,386,494 shares and preferred shares to 903,629,000 issues from 18,072,580 issues, but its market capitalization will stay unchanged.
The shareholders also approved expanding board members to 11 members from nine. The company newly appointed four internal directors and three independent members.
The meeting was chaired by Kwon Oh-hyun who will step down as vice chairman and head of the board of directors after the meeting. Lee Sang-hoon, Samsung Electronics chief financial officer is to succeed Kwon as chairman of the board of directors.
At the meeting, Kwon announced that the company will depend more on higher dividend payouts to bolster shareholder value than stock buybacks by 2020 after he confirmed 5.8 trillion won dividend, tantamount to half of the company’s free cash flow at the end of 2017. The company purchased and canceled treasury shares worth 9.2 trillion won last year as part of efforts to bolster shareholder value.
For full 2017, Samsung Electronics registered a net profit of 42.19 trillion won on revenue of 239.58 trillion won on a consolidated basis.
Koh Dong-jin, head of Samsung`s IT & Mobile Communications Division, demonstrates Galaxy S9 and Galaxy S9 Plus smartphones at a showcase event held in China early March.
In response to shareholders’ concerns over Samsung Electronics’ struggle in the Chinese smartphone market, Koh Dong-jin, head of the tech firm’s mobile division who was among four internal directors newly appointed at the meeting, vowed to restore its reputation in China.
He said the company has replaced senior managers in China and simplified sales teams over the last year to speed up its decision-making process.
The Chinese smartphone market is dominated by home-grown brands with Huawei, Oppo, Vivo, and Xiaomi together accounting for 66.3 percent of the market last year, while Apple took fifth place with around 10 percent. Samsung Electronics remained out of the top ranking after it lost ground due to local rivals that have launched competitively priced models.
The meeting was attended by nearly 400 shareholders and Samsung’s top management, but Jay Y. Lee, Samsung Electronics vice chairman and heir to the Samsung empire who was released by the appeals court, was absent. Lee had been detained after being indicted on corruption charges linked to impeached former Korean president Park Guen-hye and was released in February after an appeals court reduced his jail term to two and a half years with four-year probation.
By Hwang Hyung-gyu and Cho Jeehyun
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