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Samsung Launches $1.7B Share Buyback for Employee Stock Rewards

Samsung Electronics has announced a major share buyback worth approximately $1.7 billion. The repurchased treasury shares will be used to fund employee stock-based compensation programs. This includes a newly introduced performance-linked stock unit (PSU) program that ties rewards to stock price appreciation over three years. The initiative aims to better align employee incentives with the creation of shareholder value.

Key Points: Samsung $1.7B Share Buyback for Employee Compensation

  • $1.7 billion share buyback
  • Funds employee stock compensation
  • Supports new PSU program
  • Aligns employee and shareholder interests
2 min read

Samsung Electronics to initiate USD 1.7 billion share buyback for employee rewards

Samsung Electronics initiates a $1.7 billion share buyback to fund stock-based compensation programs, including a new PSU scheme for employees.

"Samsung Electronics noted that the buyback is intended to be used for stock-based compensation - Pulse Report"

Seoul, January 8

Samsung Electronics Co. announced on Wednesday its decision to purchase treasury shares worth approximately 2.5 trillion won. The technology giant intends to utilize these shares for employee stock-based compensation programs. This move follows a board meeting where the company finalized plans to buy back a total of 18 million shares between January 8 and April 7.

"Samsung Electronics Co. said on Wednesday that it will purchase treasury shares worth about 2.5 trillion won ($1.72 billion) to spend for employee stock-based compensation," according to a report by Pulse, the English service of Maeil Business News Korea.

The buyback value is calculated based on the closing price of 138,900 won (USD 95,618) per share recorded on Tuesday. The company noted that the actual number of shares acquired during this period remains subject to change depending on future stock price movements.

Samsung Electronics stated that the buyback supports various stock-based compensation initiatives, including the performance-linked stock unit (PSU) program, which the company introduced in October last year.

"Samsung Electronics noted that the buyback is intended to be used for stock-based compensation, including the performance-linked stock unit (PSU) program introduced in October last year, as well as performance incentives such as excess profit incentive (OPI) system," the report said.

The PSU program functions as a new scheme separate from the OPI system. A primary feature of this program ensures that employee compensation increases in direct proportion to the rise in the company's stock price.

"Under Samsung Electronics' PSU program, employees will receive treasury shares based on the extent of the company's stock price appreciation over the next three years," the report noted.

By linking compensation to stock performance, the company aligns employee incentives with shareholder value.

- ANI

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Reader Comments

P
Priya S
While this is a positive step for employee welfare, I hope this level of investment in human capital is also seen in their manufacturing units, especially concerning worker safety and fair wages across all regions.
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Rohit P
$1.7 billion! That's a massive amount. It shows confidence in their own future stock performance. As a shareholder in some Indian IT firms, I wish more of our homegrown giants had such transparent, long-term incentive plans for their teams.
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Sarah B
Aligning employee pay with shareholder value is smart business. The three-year PSU plan encourages people to think long-term, not just chase quarterly targets. More stability for everyone involved.
K
Karthik V
Good for Samsung employees. But let's be real, how many Indian employees in their R&D centers here will actually benefit from this global scheme? Often these big announcements have fine print that excludes major operational hubs outside Korea.
M
Michael C
Interesting model. Tying compensation directly to stock price over three years reduces short-term risk-taking and promotes sustainable growth strategies. A lesson in corporate governance.

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