Korean business leaders rush to buy back own shares to improve shareholder value

[Photo by Park Hyung-ki]

Leaders of South Korea’s top companies are actively buying back treasury shares amid growing concerns about worsened earnings due to the sluggish economy and weak stock prices.

According to the Financial Supervisory Service on Tuesday, Choi Soo-yeon, chief executive officer (CEO) of Naver Corp., bought 1,026 shares in Naver worth 200 million won ($151,179) on Monday. The stock was priced between 194,200 won and 194,600 won apiece. Kim Nam-sun, Naver’s chief financial officer, also bought 519 shares worth 100 million won for 193,000 won apiece on the same day.

Choi and Kim, who began their current roles in March last year, raised their stock ownership.

“The CEO and CFO’s buybacks represent their strong determination to drive the company’s growth and promote responsibility management,” Naver said.

Samsung Electronics Co. also disclosed Tuesday that Kyung Kye-hyun, head of device solutions, purchased 3,000 shares in the company for 60,700 won apiece on March 22. The shares are worth 182 million won.

Cho Joo-wan, CEO of LG Electronics Inc., also bought 2,000 shares in the company worth 227 million won on March 29. LG Energy Solution Ltd. (LGES) Vice Chairman and CEO Kwon Young-soo also bought 1,000 shares in the company worth 572 million won. He had also bought 1,000 shares in April last year for 420,000 won apiece.

“Kwon expressed his strong desire to improve shareholder value and ensure responsible management with the buyback this year,” LGES said.

SK square Co. an investment-focused company that separated from SK telecom Co., also said that its CEO Park Sung-ha bought 5,000 shares worth 193.3 million won on April 5. Park, who was appointed to the post last month, shared the company’s shareholder return policy, such as the plan to spend more than 30 percent of its current dividend income to buy back shares and retire them before the end of the year.