Samsung Electronics May Be Preparing a Package Worth Over 100 Trillion Won for Shareholders

Samsung Electronics is preparing to announce a shareholder return package worth over 100 trillion won ($72 billion), which could become the largest shareholder payout in South Korean company history.

According to MoneyToday, citing industry sources, Samsung's board of directors will convene by the end of August and may approve a special cash dividend plan. The program's financing will likely be funded primarily through 50% of the company's free cash flow (FCF).

This information came one day after SK Hynix announced a stock buyback program valued at 40 trillion won ($29 billion). Both cases point to an increasing scale of capital returns to shareholders by South Korean chipmakers.

Some analysts had speculated that Samsung's shareholder returns could reach 200 trillion won, but according to MoneyToday, such a volume is considered less realistic, as the company needs to make significant investments.

Samsung's program is expected to focus primarily on cash dividends rather than stock buybacks. One reason for this may be related to additional regulatory issues affecting Samsung Life Insurance and Samsung Fire & Marine Insurance.

Samsung announced last month that its board of directors would consider the company's current-year shareholder return plan, including the possibility of special dividends. The company also noted that returning funds to shareholders would be balanced against investments needed for future growth.