Big firms to give larger dividends

The first “Super Shareholders’ Day” of the year on Friday is expected to see major conglomerates making substantial changes in their governing structure and offer bigger dividends.

Some 54 companies listed on the primary Kospi and tech-heavy secondary Kosdaq markets, including major affiliates of Samsung, Hyundai Motor and Posco Group, are holding shareholders’ meetings tomorrow, according to the Korea Securities Depository. All the other listed companies in the Seoul bourses are slated to hold their meetings on the next two Fridays.

As well as the management changes, major companies are also expected to provide larger dividend payouts to shareholders, which has been the government’s larger campaign in lifting the domestic economy.

Samsung Electronics and Samsung Life Insurance plan to discuss easing requirements in appointing the chairman of the board of directors. This is an effort to enable the board to name non-executive directors as head of the board, the companies wrote in their regulatory filing submitted to the Financial Supervisory Service. So far, only the CEOs were eligible to be named as the chair.

Hyundai Motor Group will vote to reappoint Chairman Chung Mong-koo as the board member at Hyundai Mobis, and Vice Chairman Chung Eui-sun as a board member at Hyundai Motor and Kia Motors.

“Such a move is aimed at empowering the board of directors to oversee the business decisions made by the CEO and management,” said Chung Sung-yup, a senior researcher in governance research department at Daishin Economic Research Institute.

“Considering the culture in the Korean private sector, it will be difficult for an non-executive of the board to be the chairperson. But this still is a healthy change.”

Conglomerates are also slated to revise governance policies to pay dividends more frequently.

Posco plans to vote on expanding the dividend distribution to three times a year - in March, June and September - from the current once a year.

Samsung Electronics will also discuss expanding dividend payments from twice to four times a year, and to limit the amount of new shares to be assigned to non-shareholders when issuing stocks to expand capital.

?Of the 238 affiliates of the 49 conglomerate groups in Korea, some 165 companies announced they will give out a total dividend of 13.1 trillion won ($10.7 billion) for the 2015 business year, up 17.3 percent compared to a year ago, according to data compiled by CEO Score, a corporate management assessment firm.

The nation’s 10 largest groups accounted for almost 82 percent of the total dividends, or 10.6 trillion won, given out for the 2015 business year.

Samsung Group last year gave out 4.19 trillion won in dividends topping the rank in dividend payouts. Lotte and SK Group showed the sharpest rise in dividends last year. ??

Next Friday, some 266 listed companies, including affiliates of SK, LG, Hyundai, Hanjin and Hanwha Group, are scheduled to hold their meetings.

Samsung Heavy Industries, Kia Motors, Lotte Shopping and Naver are also preparing for their meetings on the same day. Another 410 companies that are planning to hold their meeting on March 25, include some affiliates of Hanwha Group, LG and NCsoft.

BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]