Input 2021.03.25 14:40
“The introduction of quarterly dividends will increase shareholder value”
SK Telecom CEO Park Jeong-ho said at the regular shareholders’ meeting held at the T Tower in Euljiro, Seoul on the morning of the 25th, “We will certainly implement a corporate governance reform this year so that the most benefits will be returned to our shareholders.”
Since last year, SK Telecom has begun preliminary work on its governance structure by establishing it based on new businesses such as media, mobility, security, and distribution. After dividing SK Telecom into a telecommunications business company and an investment and holding company, the core content is that the investment and holding companies encompass SK Group’s ICT subsidiaries such as SK Broadband and SK Hynix.
The shareholders’ meeting on this day did not include an agenda related to SK Telecom’s transition to an intermediate holding company, but a related question was raised as the biggest concern of shareholders.
At the same time, SK Telecom unveiled its plans for IPO of its subsidiaries. SK Telecom’s subsidiaries, which are currently listed on the stock market, are one store, an app market service company, Content Wave, an online video service (OTT) wave operator, and 11st, an online shopping mall. First, starting with the One Store, ADT Caps, Wave, and 11st are preparing for listing. The listing of the subsidiary is in line with the timing of the corporate governance reform.
CEO Park added, “If you combine business portfolios as well as subsidiaries, we have not been able to cover them enough, so we have been thinking about this for a long time, and I think it is feasible this year.”
The amendment to the Fair Trade Act is also a factor that hastened SK Telecom’s transition to an intermediate holding company. Starting from next year, the holding company’s obligation to convert to a new holding company will increase to 30% and 50%, respectively, from 20% of subsidiaries and 40% of subsidiaries and subsidiaries that are incorporated into a holding company.
From the perspective of minority shareholders in the securities industry, opinions are diverging over whether the restructuring of governance is a good or bad thing. It may be difficult to appeal to shareholders that switching to an interim holding company can continue to grow the corporate value of a telecommunications business company (completely separated from the new business).
Accordingly, SK Telecom will abandon the existing method of paying interim dividends once more at the end of June every year for the past 16 years and pay dividends four times each quarter. It is to increase the corporate value by enhancing the attractiveness of investment. The cash dividend amount was confirmed to be 10,000 won per share, including the interim dividend of 1,000 won paid in August of last year.
CEO Park said, “There is an evaluation that the quarterly dividend is in line with the global standard, and it is expected that the predictability will increase and the shareholder value will be further enhanced,” he said. “You don’t have to worry that the dividend will be lower than now.”
Regarding the recent acquisition of eBay Korea, he said, “The reason we participated in the acquisition of eBay Korea is that it is expected to affect SK Telecom’s strategic liquidity.” As much as we are doing, we need a convergence strategy.”
Meanwhile, SK Telecom re-appointed Yoo Young-sang Mobile Communication (MNO) Business Representative as internal director and Professor Yoon Young-min of Korea University as external director and audit committee member. The SKT board of directors consists of a total of 8 members, including 2 inside directors, 1 other non-executive director, and 5 outside directors.