Samsung Electronics shares fell 8.7% on Monday, wiping out earlier gains after the company’s record shareholder return plan disappointed investors demanding more aggressive buybacks and treasury share cancellations. The stock traded near 257,000 won, dragging South Korea’s KOSPI index down more than 3%.
The plan, announced on August 21, promised to return between 90 trillion and 110 trillion won — approximately $65 billion to $79 billion — to shareholders in 2026. That is roughly five times the previous annual record of 20.3 trillion won set in 2020. It includes about 30 trillion won in third-quarter cash dividends, while the board approved a separate 15 trillion won share buyback for employee compensation. The remaining payouts and any additional buybacks or cancellations will be determined in January 2027 after full-year results are confirmed.
Despite the headline figure, investors said the announcement lacked clarity on share repurchases and treasury cancellations, which can more directly support earnings per share and valuations. Morgan Stanley described the package as “big capital returns, slightly below expectations.” Eugene Securities analyst Sohn In-joon said the absence of a plan to raise the existing shareholder return policy or cancel treasury shares was disappointing.
The reaction was amplified by rival SK Hynix, which recently announced a 40 trillion won share buyback and cancellation program and pledged to allocate more than 50% of its free cash flow from 2025 to 2027 to shareholder returns. SK Hynix ended down about 2.5% to 2.7%, outperforming Samsung. Analysts expect Samsung’s remaining 60 trillion to 80 trillion won to flow mostly to dividends, with only 10 trillion to 20 trillion won likely allocated to buybacks and cancellations.
Samsung’s ownership structure also complicates aggressive repurchases. Samsung Life Insurance and Samsung Fire & Marine Insurance hold large stakes in Samsung Electronics; significant buybacks could push those affiliates above South Korean regulatory ownership limits. On Monday, Samsung Life fell 9.9% and Samsung Fire dropped 8%. The sell-off highlights how AI-fueled earnings expectations have raised the bar for capital returns across the semiconductor sector, where Nvidia, Micron and Broadcom remain central to the broader AI chip trade.
