Samsung Electronics' Seocho office building in Seoul [Yonhap]
Samsung Electronics' Seocho office building in Seoul [Yonhap]

Samsung Electronics will dispose of approximately 320 billion won ($273 million) worth of treasury shares to fund long-term performance bonuses for its executives.

Samsung Electronics disclosed Monday that it will dispose of 1,132,477 treasury shares to pay a portion of long-term incentives in stock, with the aim of strengthening executive accountability and motivating long-term performance.

The disposal is valued at 322.76 billion won, based on the closing share price of 285,000 won on Friday — the last trading day before the board resolution.

A total of 928 executives and other eligible recipients are set to receive the shares, with each person expected to receive stock worth close to 350 million won on average.

Samsung Electronics operates a long-term incentive (LTI) program that pays executives with at least three years of service a reward based on the company's earnings over the preceding three years, distributed over the following three years. The payout ranges from 0 to 300 percent of average annual salary depending on performance.

Starting last year, the company revised the program to allow a portion of LTI payouts to be made in treasury shares, as part of efforts to reinforce executive accountability.

"The shares to be disposed of represent approximately 0.019 percent of total issued common shares — 5,846,278,608 shares — and the dilutive effect on share value is expected to be minimal," Samsung Electronics said.


husn7@heraldcorp.com