Samsung Electronics Plans $59 Billion Share Buyback

Samsung Electronics is planning to buy back its own shares worth about 90 trillion won ($58.6 billion), according to a report by Yonhap News Agency. After the news came out, Samsung’s share price jumped more than 6%. The company also recently reached a wage agreement with its employee union. As part of the deal, Samsung is expected to give special bonuses to workers in its chip division in the form of ESOPs. These bonuses could be worth around 10.5% of the division’s yearly operating profit. 

Employees who receive these shares will be able to sell one-third of them right away. They will have to wait one year to sell another third, and two years to sell the remaining. Samsung may also need to buy more shares for another employee reward program called the Performance Stock Unit (PSU). This program was introduced last year to connect employee rewards with the company’s long-term stock performance.

The report said Samsung could soon announce more details about the share buyback plan. The company has not yet commented on the report. Samsung Electronics and SK Hynix are expected to earn record profits this year and next year. The growing demand for artificial intelligence (AI) has increased the need for memory chips, as technology companies are building more data centres to train and run AI systems. 

Samsung shares rose 6.3% on Wednesday, while SK Hynix shares gained 1.6%. Samsung also regained its position as South Korea’s most valuable company by market value.