Samsung Electronics (005930.KS) will execute shareholder returns of up to 110 trillion won (approximately $79.5 billion) this year. In Q3 alone, the company will pay approximately 30 trillion won (approximately $21.7 billion) in cash, including regular dividends, with the remaining funds to be allocated through a comprehensive review of cash dividends and share buybacks/cancellations in January next year.

Samsung Electronics disclosed on the 21st that its board of directors approved a 2026 shareholder return program expected to total approximately 90 trillion to 110 trillion won (approximately $65.1 billion to $79.5 billion). This is roughly five times the previous record of 20.3 trillion won (approximately $14.7 billion) set in 2020, marking the largest-ever shareholder return by a South Korean listed company. Compared with the annual average shareholder return of 13.8 trillion won (approximately $10.0 billion) over the ten years from 2016 to 2025, this year’s figure is approximately seven times larger.

This decision implements the company’s existing policy of returning 50% of total free cash flow (FCF) generated over the three-year period from 2024 to 2026 to shareholders. Samsung Electronics paid regular dividends totaling 19.6 trillion won (approximately $14.2 billion) — 9.8 trillion won (approximately $7.1 billion) each in 2024 and 2025 — and in 2025 also executed a special dividend of 1.3 trillion won (approximately $939.6 million) and share buybacks/cancellations worth 8.4 trillion won (approximately $6.1 billion). Including this year’s return, the cumulative three-year shareholder return total is projected to reach 120 trillion to 140 trillion won (approximately $86.8 billion to $101.2 billion).

Samsung Electronics plans to first execute approximately 30 trillion won in cash dividends in Q3, including the regular quarterly dividend. The specific dividend amount and details will be finalized at the board meeting in late October. Given that the regular quarterly dividend is approximately 2.45 trillion won (approximately $1.8 billion), the special dividend is expected to exceed 27 trillion won (approximately $19.5 billion).

The size and method of the remaining shareholder return funds will be finalized at the board meeting in late January next year, after this year’s financial closing is completed. Samsung Electronics plans to comprehensively consider cash dividends and share buybacks/cancellations in executing the program. Accordingly, not all of the 90 trillion to 110 trillion won announced on this day will be paid as cash dividends; the allocation of the remaining funds beyond the 30 trillion won will not be determined until January next year.

Samsung Electronics stated that when calculating the three-year FCF, it will deduct advance payments from long-term supply agreements (LTAs) for memory products, which are deposit-like in nature, as well as expenditures related to employee performance-based stock compensation. The company also explained that the 90 trillion to 110 trillion won estimate is based on current financial projections and business plans, and may vary depending on actual operating results, investment execution, and cash flow.

Separate 15 Trillion Won Share Buyback for Employee Compensation

In addition to the shareholder return program, Samsung Electronics also approved on the same day the acquisition of approximately 15 trillion won (approximately $10.8 billion) in treasury shares for employee stock compensation. The planned acquisition amount is 14,999,999,999,200 won, which, based on the closing price of 281,500 won (approximately $200) per common share on that day, equates to 53,285,968 shares. The actual number of shares purchased may vary depending on future stock price movements.

Samsung Electronics will purchase treasury shares on the Korea Exchange’s KOSPI market over approximately three months, from the 24th to November 21st. Samsung Securities, Shinhan Securities, and KB Securities will handle the purchases. The daily purchase order limit is 7,321,653 common shares.

The purchased shares will be used for stock-based compensation, including employee performance incentives and special management performance bonuses. Samsung Electronics stated in its disclosure that the purpose is “to use for stock-based compensation operated to motivate employees for performance creation.” This decision also serves as a confirmation disclosure regarding reports of large-scale share buybacks raised in June. After clarifying on June 24 and July 23 that related reports were unconfirmed, Samsung Electronics presented on this day the confirmed plan for “a 15 trillion won share buyback for stock compensation purposes based on 2026 business performance.”

However, this 15 trillion won share buyback for employee compensation is distinct in nature from the 90 trillion to 110 trillion won shareholder return program. Samsung Electronics disclosed that it will deduct expenditures related to employee performance-based stock compensation when calculating the three-year FCF, thereby distinguishing between share buybacks/cancellations for direct shareholder returns and purchases to secure shares for employee compensation.

78.9 Billion Won Contribution to DS Partner Company Incentive Fund

Samsung Electronics also approved on the same day a contribution of 78.9 billion won (approximately $57.0 million) to an incentive fund for small and medium-sized partner companies among on-site partner companies in the Device Solutions (DS) division. This is a separate matter from the shareholder return program and the employee compensation share buyback.

The fund will be used to prevent safety accidents at semiconductor facilities, improve quality, and expand win-win cooperation activities with partner companies. It will be distributed as safety incentives and productivity encouragement payments. Safety incentives will be paid twice a year — in September and February next year — at different tiers based on evaluation results for each partner company. Productivity encouragement payments will be paid once in February next year to partner companies not included in the safety incentive recipients. Samsung Electronics will contribute the fund to the Large and Small Business and Agriculture and Fisheries Cooperation Foundation, which will then distribute payments to each partner company.

Stock Price Swings in After-Market Trading Following Disclosure

Expectations for large-scale shareholder returns were already reflected in the stock price before the announcement. On this day, Samsung Electronics closed at 281,500 won on the Korea Exchange, up 3.87% from the previous trading day. This followed a 9.49% surge the previous day, marking two consecutive days of strength. The stock rose as high as 285,000 won (approximately $210) intraday, reflecting expectations for expanded shareholder returns.

However, the stock price swung significantly in after-hours trading following the disclosure. According to Nextrade (NXT), Samsung Electronics traded at 273,500 won (approximately $200) in the after-market around 5:30 p.m., 2.84% below the Korea Exchange (KRX) regular session closing price. Immediately after the disclosure, the stock briefly fell to 266,000 won (approximately $190), down 5.51% from the regular session close.

While the shareholder return capacity of up to 110 trillion won has been confirmed, investors must wait until January next year to learn how the remaining funds — beyond the approximately 30 trillion won Q3 cash dividend — will be allocated between dividends and share buybacks/cancellations. Analysts note that with expectations for shareholder return size already priced into the stock, the lack of confirmation on specific share cancellation amounts and execution methods fell somewhat short of market expectations.

Lee Su-rim, an analyst at DS Investment & Securities, projected that “if the board decides in January next year to allocate part of the remaining 60 trillion to 80 trillion won (approximately $43.4 billion to $57.8 billion) to additional cash dividends, the final dividend per share (DPS) could rise further.” The market currently estimates the expected DPS for this year, including the Q3 cash dividend, at approximately 5,570 won (approximately $4). This significantly exceeds the approximately 2,990 won (approximately $2.2) paid in 2020, when a special dividend was also executed.

Since listing on the South Korean securities market in 1975, Samsung Electronics has paid cash dividends every year except 1980, when it recorded a net loss due to the oil shock. Cumulative cash dividends from 2015 through last year alone amount to 102.8 trillion won (approximately $74.3 billion). Since announcing in 2016 its policy of using 50% of FCF for shareholder returns, the company has maintained this approach, enhancing predictability for investors.

A Samsung Electronics official said, “The largest-ever shareholder return is intended to ensure that the results of the company’s growth translate into tangible benefits for shareholders,” adding, “Through this, we will continue the virtuous cycle of company growth and enhanced shareholder value, and we plan to actively communicate with shareholders and the market going forward.”