Treasury share disposal plan covering more than half of issued shares to go before shareholders

5.26 million shares to be canceled; 3.16 million to be retained for future use

Per-share dividend raised 2,500 won from a year earlier to 7,500 won

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Shinyoung Securities plans to cancel treasury shares equivalent to 32% of its total issued shares. The brokerage has finalized its disposal plan ahead of the legal deadline under a revised Commercial Act that makes cancellation the default treatment for treasury shares, and intends to use the remaining holdings for shareholder returns and employee performance compensation.

The company announced Thursday it will bring a plan covering all 8,422,754 treasury shares — representing 51.23% of total issued shares — to its annual general meeting on June 19.

Of that total, 5,262,283 shares, or 32.01% of all issued shares and 62.48% of its treasury holdings, will be canceled. The remaining 3,160,471 shares have been designated for retention and future disposal, to be used for shareholder returns and executive and employee performance compensation.

Treasury shares are shares a company has previously bought back and holds. Canceling them reduces the total number of shares outstanding, which can improve per-share metrics such as earnings per share and book value per share.

The shares slated for cancellation are existing preferred shares. In April 2024, the company converted those preferred shares into common shares to protect the rights of preferred shareholders.

Under the revised Commercial Act, treasury shares acquired before the law took effect must either be canceled or managed under a retention and disposal plan approved by shareholders by September 2027. Shinyoung Securities said it is bringing the matter to this year's annual general meeting — more than a year ahead of the statutory deadline — to remove uncertainty around its treasury share holdings as early as possible.

The recent overhaul of treasury share rules has focused on curbing the opaque potential uses once dubbed "treasury share magic." Although treasury shares carry no voting rights, the manner in which they are held or disposed of can affect existing shareholder value, making cancellation decisions and intended uses key factors in investment decisions.

The company also expanded its dividend. Shinyoung Securities set its year-end dividend for common shares at 7,500 won per share, up 2,500 won from a year earlier. The increase will raise the total dividend payout by approximately 20 billion won (about $13.2 million).

The specific plan for the remaining 3,160,471 treasury shares will be finalized through a future shareholder vote. The company outlined its basic direction — using those shares for shareholder returns, shareholder value enhancement and employee performance compensation — and said the timing and method of disposal will be confirmed at a general meeting before September next year, in accordance with Commercial Act procedures.

"Given the longstanding attention our high treasury share ratio has attracted, we want to respond proactively and exemplarily to the capital market's call for corporate value enhancement and the intent of the revised Commercial Act," a Shinyoung Securities official said. "Rather than waiting until the legal deadline, we want to use this general meeting to send a clear message to the market — that we have decided on the cancellation scale in advance and that the remaining treasury shares will also be used to maximize shareholder value."


kacew@heraldcorp.com