Samsung Electronics”large dividend’… becoming the largest beneficiary of the national pension

While Samsung Electronics decided to pay a total of 13 trillion won in dividends as of the fourth quarter of last year, the national pension, the largest shareholder who owns more than 10% of Samsung Electronics’ shares, has benefited the most. The late Samsung Electronics Chairman Lee Kun-hee and Vice Chairman Lee Jae-yong also receive a dividend of nearly 700 billion won for the fourth quarter of last year.

Samsung Electronics announced on the 28th that it will pay a regular dividend of 354 won per common share and 355 won per preferred share and a special dividend of 1578 won per share as of the fourth quarter of last year. As a result, a dividend of 1932 won per common share of Samsung Electronics is paid to shareholders.

The total dividend that Samsung Electronics pays this time will exceed 13 trillion won. In addition to regular dividends, special dividends are added, and about 13,124.3 billion won is spent as dividends.

Of these, more than 1 trillion won goes to the national pension, the largest shareholder. As of the end of last year, the National Pension, which owns a 10.9% stake in Samsung Electronics, including 638.878,000 shares of Samsung Electronics’ common stock and 8,498,000,833 preferred stocks, will receive a total of 1.25 trillion won, including special dividends.

The dividend of the family, including the late Chairman Lee Kun-hee, is estimated to have exceeded 600 billion won. Chairman Lee, the largest individual shareholder, owns 249,233,200 common stocks and 610,900 preferred stocks of Samsung Electronics, and receives a total of 488.2 billion won, including special dividends. Chairman Lee’s share of ownership is 4.26%.

The dividend received by Chairman Lee goes to the bereaved family. Until now, it is not known whether Chairman Lee left a will related to inheritance and who if he left it, so it is not known. It is not known how much dividends each chairman of the Welfare Foundation will inherit.

If Chairman Lee decided to inherit power to his son and successor, Vice Chairman Lee, this dividend, which is close to 500 billion won, is analyzed to have provided financial resources to partially resolve the inheritance tax burden.

Vice-Chairman Lee, who owns 0.7% of Samsung Electronics, is expected to receive a dividend of about 81.2 billion won. As of the end of last year, Vice Chairman Lee owns 42.2,150 common shares of Samsung Electronics alone.

Former Director Hong holds 54,53,600 common shares of Samsung Electronics, and will receive about 104.6 billion won from this dividend. Former Director Hong has a 0.91% stake, the second largest after Lee.

The two daughters of the total family, President Lee Boo-jin and Chairman Lee Seo-hyun, do not own a stake in Samsung Electronics, so this is not applicable to Samsung Electronics’ large-scale dividend.

However, Samsung C&T, an affiliate that owns more than 5% of Samsung Electronics’ shares, also receives nearly 100 billion won more than the dividend of Chairman Lee through this dividend. Samsung C&T, which owns 29,881 million shares of Samsung Electronics’ common stock, is expected to receive a total of 5773 billion won including special dividends.

Prior to the dividends and special dividends for the fourth quarter of last year determined on this day, Samsung Electronics completed a total dividend of 1062 won per common share over the first to third quarters of last year. As a result, the total dividend paid per share of Samsung Electronics’ common stock over the past year was 2944 won.

According to this standard, the dividend of Samsung Electronics obtained by the National Pension System on an annual basis last year is close to 2 trillion won. Last year’s annual dividend for the three family members, including Chairman Lee, was a little over 1 trillion won. Among them, the share of Chairman Lee, who died, is about 750 billion won, and that of former director Hong and Vice-Chairman Lee is about 100 billion won.

It is encouraging that a significant portion of Samsung Electronics’ dividends received by the head of Samsung’s family will be used for inheritance tax, which is set at 11 trillion won. Chairman Lee’s stock inheritance price, determined at the end of December last year, totaled 18,963 billion won. It is highly likely to be solved.

If this method is chosen, the tax on the inheritance of Samsung Electronics’ shares, which must be paid by April, is about 1.5 trillion won, which is a sixth of the total inheritance tax. As the total family received a total dividend of over KRW 1 trillion last year, in fact, the entire dividend must be poured into the first inheritance tax payment.

Although Samsung Electronics decided to expand its dividend over the next three years through the announcement of this shareholder return policy, the total family members are in a position to use the dividends received each year as a source of inheritance tax. Samsung Electronics announced that it will increase its annual regular dividend from this year to 2023, increasing its annual dividend from 900 billion won to 9.8 trillion won. Last year, regular dividends were decided within the existing limit, but as this limit is raised from this year, it is highly likely that regular dividends will also expand.

In addition to regular dividends, the policy is to actively continue the special dividend policy that is implemented on a large scale like this one for the time being. Samsung Electronics is applying a policy to additionally return the remaining financial resources generated within 50% of free cash flow (FCF) for three years after regular dividends.

Starting from this year, the size of the FCF will be shared with shareholders on an annual basis to clarify the amount of remaining financial resources. A new plan has also been proposed that will consider ways to return it early if a meaningful level of remaining financial resources is accumulated within the possible range.