Samsung Retail Investors Push for Special Meeting on $32 Billion Buyback, Bonus Caps

A South Korean retail investor group has initiated a campaign to compel Samsung Electronics to hold an extraordinary shareholders' meeting, seeking a vote on a massive share buyback and new limits on employee performance bonuses. The move comes after the company's stock has fallen significantly from its recent highs.

Shareholder Proposals

The shareholder platform, known as ACT, announced Tuesday it is collecting electronic signatures to force the meeting, according to a report from Reuters. The group's two primary proposals are:

• A share buyback program totaling 45.5 trillion won ($31.79 billion).
• A new rule requiring shareholder approval for the upper limit on performance bonuses linked to operating profit.

To formally call the meeting, ACT must secure support from investors holding at least a 3% ownership stake in the electronics giant. The group stated it is also seeking backing from the National Pension Service and other domestic and international asset managers to reach the required threshold.

Context and Motivation

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The activist push follows a sharp decline in Samsung's stock value, which has shed more than one-third of its value since hitting a record high in June. The downturn has been attributed to a wave of market deleveraging and investor skepticism regarding the durability of spending on artificial intelligence infrastructure.

In a statement, ACT framed the campaign as a move to improve corporate governance and shareholder returns. "This is not simply an expression of dissatisfaction over a falling share price. We are asking a basic capital-market question: who really owns a corporation?" the group said, adding the goal is to help Samsung become a more "shareholder-friendly company."

Scrutiny Over Bonus Structure

The proposal to subject bonuses to a shareholder vote follows a wage agreement Samsung reached in May to avert a major strike. As part of that deal, the company agreed to allocate 10.5% of its chip division's operating profit for special employee bonuses.

ACT argued that potential payouts of this scale, which it estimates could reach hundreds of billions of dollars over a decade, should not be determined solely by the board of directors. Samsung Electronics did not immediately respond to a request for comment, Reuters reported.