Samsung Signed 317 Stock-Payment Agreements Last Year, More Than Half of Big Business Groups’ Total

Samsung signed 317 new agreements last year to provide stock-based rewards to executives, accounting for more than half of all such agreements among South Korea’s major business groups.

The Fair Trade Commission said on September 3 that 15 groups, including Samsung, SK, Hanwha, Shinsegae and Doosan, had signed a combined 585 agreements covering controlling owners, their relatives and executives. The figure rose 65.7% from 353 agreements a year earlier.

Samsung had signed no such agreements the previous year, but added 317 for executives last year. Six business groups also signed 19 agreements involving 11 controlling owners or relatives who served as executives. Doosan, Amorepacific and Kyobo Life Insurance made agreements with controlling owners, while Hanwha, Woongjin and Eugene targeted second-generation members of controlling families.

Kim Min-a of the commission’s corporate group information analysis team said the agency was monitoring the arrangements because stock payments could become concentrated among controlling families or other related parties. “We are carefully monitoring this in preparation for the possibility that stock payment agreements could lead to concentration among controlling families or related parties of large business groups,” she said.

The commission also reported that internal ownership at the 89 owner-led groups stood at 61.4%, down from 62.4% the previous year. Controlling families held an average 3.5%, while affiliated companies held 55.5%. The agency said both figures had edged down, but a substantial gap remained between families’ direct stakes and overall internal ownership.

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We are carefully monitoring this in preparation for the possibility that stock payment agreements could lead to concentration among controlling families or related parties of large business groups.