Samsung says no plan for stock split

Conglomerate to maintain flexibility in 2016 hiring

By Kim Yoo-chul

Senior Samsung executives said Wednesday that Samsung Electronics would not split its stocks despite calls by the country’s main bourse operator and related authorities to split stocks to bring in retail investors and spur trading volume.

“Currently, Samsung Electronics has no imminent plans to split stocks,” Lee Sang-hoon, president of the company’s management support office, told reporters on the sidelines of his participation at Wednesday’s weekly regular meeting of presidents of Samsung affiliates in Seocho Samsung Tower, southern Seoul.

Yoon Yong-am, chief executive at Samsung Securities, said, “I’ve never heard about that (stock split) plan.” Chang Choong-key, vice head of Samsung Corporate Strategy Office, the group control tower, said, “I have no idea about that.”

The remarks came a few months after Samsung said late last year that it was considering a stock split as part of its efforts to strengthen its shareholder return policy.

Samsung Electronics shares were traded at more than $1,200 each with investors and analysts calling it a “king stock.” Given by its high stock price, retail investors have limited access to purchase the stocks.

Whether or not Samsung has a plan for a stock split has emerged as one of the top issues in the local stock market after about 10 big companies, each of them having large market capitalization, decided to split their stocks at the request of the government.

“Because Samsung Electronics’ market capitalization takes up about 17 percent on the KOSPI benchmark index, we still urge Samsung to join with other companies in splitting its stocks to make its shares more approachable for local individual investors, which will also be good to activate the local stock market,” said an official at the Korea Exchange (KRX), the country’s main bourse operator.

After growing pressure by investors asking Samsung to pay out more for dividends, Samsung said it will increase its spending to repurchase its own shares and added that the company will also increase its yearly dividend payment.

For a comparison, Samsung’s chief rival Apple experienced its share price peak with $702.10 in September 2012. Since completing a seven-for-one stock split in June last year, Apple shares have traded as high as $101, which is equalized with the value of more than $700 at the firm’s pre-split levels.

“This issue is a matter of pride. If a company maintains a high price stock price, then it will make investors think that that company is a king of kings,” said one official.

Flexibility in 2016 hiring

Separately, the group control tower said it will maintain “greater flexibility” in its hiring plans of the group affiliates.

“The corporate strategy office is underway to fix details about this year’s hiring plans; however, there won’t be any drastic cuts this year from the previous year,” Chung Hyeon-ho, chief of the human resources team at the strategy office, told reporters.

Chung said local reports which have said Samsung plans to cut this year’s total hiring by 15 percent from 2015 are “untrue,” without elaborating further.

Samsung will start its recruiting process beginning March 14. Last year, it hired 14,000 in total.

“We will try hard to maintain last year’s hiring level; however, the total amount will be different according to situations.”

Samsung unloaded its defense and chemical businesses. Also, some of the group affiliates including the battery unit of Samsung SDI are on track to restructure human resources to cut costs.