Samsung Electronics eyes separation in reform plan
Samsung Electronics on Tuesday said it was considering splitting the company into two as it faces growing pressure to overhaul its governance during a crucial power transfer in top management.
The announcement came as the South Korean electronics giant is seeking to ensure a smooth succession to Lee Jae- Yong, the firm’s vice chairman and scion of the parent Samsung group’s founding Lee family. It is also struggling to contain the fallout from a global recall of its Galaxy Note 7 smartphone caused by exploding batteries as well as a snowballing political scandal in South Korea.
The firm said in a statement it would consider breaking into a holding firm and a producing and operating unit, and would take at least six months to study the option.
It also said it would increase its dividend payout to shareholders to more than 4 trillion won (USD 3.4 billion) this year, up more than 30 per cent from a year ago.
Other options on the table include plans to nominate at least one new independent board member with “global corporate experience” for approval at an annual shareholders’ meeting next March.
The plans suggest the firm is listening to calls for change after US hedge fund Elliott last month urged it to divide into listed holding and operating firms to streamline a byzantine ownership structure.