Targeting 20% Dividend Payout Ratio by 2030
93.3% Compliance Rate with Core Governance Indicators
60% of Electricity Transitioned to Renewable Energy
LG Innotek has confirmed its cash dividend payout ratio at 11% for last year, demonstrating its commitment to returning profits to shareholders. In addition, the company is making efforts to transition its electricity use to renewable energy and increase its employment rate of people with disabilities, thereby actively pursuing ESG (Environmental, Social, and Governance) management.
On June 26, LG Innotek announced the publication of its '2024-2025 Sustainability Report.' According to the report, LG Innotek set its cash dividend payout ratio for 2024 at 11% to enhance shareholder value through profit returns, and paid a dividend of KRW 2,090 per share. As a result, LG Innotek's cash dividend payout ratio has increased for seven consecutive years since 2018.
Since 2022, LG Innotek has implemented a plan to return more than 10% of its net income to shareholders over a three-year period. Furthermore, in November of last year, the company announced a plan to enhance corporate value, unveiling a shareholder return policy to gradually increase its dividend payout ratio to 15% by 2027 and 20% by 2030.
Additionally, to improve transparency and predictability regarding dividends, LG Innotek amended its articles of incorporation so that the dividend record date is determined by a board resolution, rather than at the end of the fiscal year. This allows shareholders to confirm the dividend amount before making investment decisions.
The company also places a strong emphasis on management transparency. LG Innotek continues to strengthen the diversity and expertise of its board of directors and is making ongoing, substantive efforts to improve its governance structure to enable independent decision-making.
In particular, since 2022, LG Innotek has appointed an outside director, rather than the CEO, as the chairperson of the board. This enables mutual checks and oversight between management and the board, thereby practicing board-centered responsible management. Such a board composition is recommended by advanced economies and international economic organizations.
The results of LG Innotek's transparent governance operations can also be seen in the recently disclosed Corporate Governance Report. In this report, LG Innotek reported a compliance rate of 93.3% for core governance indicators. This exceeds the average compliance rate of 54.4% among 501 listed companies surveyed by Leaders Index, a corporate analysis research institute. LG Innotek's average compliance rate over the past five years is 90.7%, ranking fourth among domestic listed companies.
In the environmental sector, LG Innotek has set ambitious goals of '2030 RE100 (100% renewable energy) and 2040 carbon neutrality,' and is pursuing eco-friendly management. In particular, the company is focusing on securing renewable energy to transition the electricity, which is the main cause of greenhouse gas emissions, to renewable sources.
As a result, in the past year alone, LG Innotek converted 638 GWh?nearly 60% of the electricity used at its domestic and overseas sites?to renewable energy. This is an increase of 34 GWh compared to the previous year. Two domestic sites, Paju and Gumi 1A, as well as the Vietnam site, have already achieved RE100.
In recognition of these efforts, LG Innotek received a 'Leadership A Grade'?awarded to only the top 2% globally?in the CDP (Carbon Disclosure Project) climate change response assessment last year.
In the social sector, LG Innotek recorded an employment rate of people with disabilities of 3.8% last year. This not only exceeds the legally mandated rate of 3.1%, but is also higher than the average rate of 3.03% among private companies. Since 2012, LG Innotek has established and operated 'Innowid,' a subsidiary-type standard workplace, to create jobs for people with disabilities and realize social value.
In addition, by actively operating a variety of shared growth programs?including financial, management, and educational initiatives such as the Shared Growth Fund?LG Innotek has received the highest rating in the Shared Growth Index assessment by the Shared Growth Committee for eight consecutive years.
CEO Moon Hyuksu stated, "LG Innotek will continue to listen to the opinions of stakeholders and faithfully practice ESG management based on sincerity," adding, "We will provide greater value to our stakeholders and build LG Innotek into a trusted company."
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