As the semiconductor Big Two (Samsung Electronics and SK Hynix) are expected to pay performance bonuses totaling over 6.2 trillion won to employees by 2027 due to the boom in the AI (artificial intelligence) industry, it was determined on the 8th that the National Pension Service, as a major shareholder of the semiconductor Big Two, received Q2 dividends in the range of 190 billion won this year.
According to an analysis by MoneyToday of public disclosures from Samsung Electronics and SK Hynix, the National Pension Service held 460,982,761 common shares (7.89% stake) of Samsung Electronics as of the end of the first half of this year. The National Pension Service's holdings recorded in SK Hynix's semi-annual report were 57,439,774 shares (8.06%). If these holdings were maintained until the dividend record date, the Q2 dividends from both companies received by the National Pension Service are estimated to be 193.9 billion won on an arithmetic basis.
Samsung Electronics set its Q2 common stock dividend at 374 won per share in a board of directors meeting on July 30. Applying this to the number of shares held by the National Pension Service at the end of the first half, the National Pension Service's portion is 172.4 billion won. SK Hynix's Q2 dividend was 375 won per share, with the National Pension Service's portion being 21.5 billion won. The Q1 dividend per share was also effectively the same as Q2, at 372 won for Samsung Electronics and 375 won for SK Hynix. If such dividends are received every quarter, the National Pension Service would receive over 770 billion won annually in regular dividends alone. However, since Samsung Electronics announced on August [date not specified in source] that it will pay a Q3 cash dividend of 30 trillion won, which is six times the total amount of the first and second quarters, the dividend amount received by the National Pension Service is also expected to increase.
The scale of performance bonuses for the semiconductor Big Two is cited as a factor affecting the size of shareholder returns. Samsung Electronics has decided to return 50% of its free cash flow from 2024 to 2026 to shareholders, but the additional return amount exceeding regular dividends varies depending on the scale of performance bonuses.
Performance bonuses are reflected in operating expenses as labor costs, and an increase in performance bonuses reduces free cash flow. The labor and management sides at Samsung Electronics agreed last May to maintain the existing Over-Profits Incentive (OPI) and create a new Special Management Performance Bonus. The funding source for the Special Management Performance Bonus is 10.5% of business performance.
The labor and management sides at SK Hynix agreed last year to set the funding source for the Profit Sharing (PS) bonus at 10% of operating profit and abolish the cap. In this year's wage and collective bargaining agreement, after experiencing difficulties over the method of paying performance bonuses, a revised proposal was passed last month to pay 50% of the PS in cash and the remaining 50% in stock.
Backlash from minority shareholders has also emerged regarding the performance bonuses of the semiconductor Big Two. The minority shareholder platform Act visited the National Pension Service in July to deliver a letter on fiduciary duty fulfillment related to Samsung Electronics, aiming to halt the payment of the Special Management Performance Bonus.
On the other hand, counterarguments from labor groups state that this is fair performance compensation for the personnel who generated AI semiconductor results. The argument is that since they endured production cuts or losses without over-profit incentives during the semiconductor downturn, it is a fair distribution for workers to share profits sufficiently during boom times.
The Bank of Korea estimated that Samsung Electronics and SK Hynix will pay pre-tax performance bonuses of 6.2 trillion won based on this year's results. Converted to a quarterly basis, this is 1.55 trillion won, which is approximately 80 times the Q2 dividends from the two companies estimated to have been received by the National Pension Service, a major shareholder holding over 5%.
The Bank of Korea estimated the immediate cashable portion after tax, excluding taxes and treasury stock payments from annual performance bonuses, at 2.19 trillion won. It projected that if this amount leads to consumption, it will raise the economic growth rate by 0.06 to 0.09 percentage points.
The National Pension Service's holdings are not disclosed in real time. The National Pension Service also began rebalancing its domestic stock assets (asset redistribution) in July. The size of dividends received by the National Pension Service may vary depending on the scale of its holdings and each company's shareholder return policy.
According to FnGuide, as of July 6, the number of stocks in which the National Pension Service holds more than 10% was 32, a decrease of two from the end of March. The top holdings by stake are Hyundai Department Store (13.49%), Samsung Securities (13.35%), B.H. (13.35%), and Korea Financial Holdings (13.28%).
in STOCK
