Hecto Innovation Decides to Acquire Treasury Shares Worth 8 Billion KRW

Hecto Innovation, an IT-based information service company, announced on July 3 that its board of directors has resolved to enter into a trust agreement for the acquisition of treasury shares worth 8 billion KRW.

According to the disclosure, the purpose of acquiring treasury shares is to enhance shareholder value, prepare for stock cancellation, and secure the necessary quantity for granting Restricted Stock Units (RSUs) to employees. The planned number of shares to be acquired is 556,940.

Hecto Innovation previously announced a "three-year shareholder return plan" that includes the cancellation of treasury shares and strengthening of dividend policy. In line with this plan, the company canceled 132,572 shares in December last year, equivalent to 1% of the total number of shares issued at that time. The planned number of shares to be acquired this time includes the amount scheduled for cancellation in 2025 and 2026.

Additionally, a portion of the shares is intended to secure the quantity needed for RSU grants, which are linked to market capitalization and employee performance, in order to align the interests of shareholders and employees and strengthen motivation for enhancing shareholder value. The company has previously decided to grant RSUs to employees if the market capitalization reaches 500 billion KRW.

Lee Hyuncheol, CEO of Hecto Innovation, stated, "In accordance with our shareholder return plan, we are implementing annual share cancellations and increasing our dividend payout ratio. At the same time, we are expanding bonus policies linked to company shares so that employees can recognize the importance of shareholder value," adding, "We will continue to expand various policies to enhance shareholder value along with the company’s long-term growth."

Meanwhile, Hecto Innovation announced its "three-year shareholder return plan" last year, which includes treasury share cancellation and strengthening of dividend policy, and has been consistently implementing it. In December last year, the company canceled 1% of its treasury shares in line with the plan. This year, it paid a cash dividend of 490 KRW per share, recording a net profit payout ratio of 23.2%. Notably, by canceling 132,572 treasury shares last year, equivalent to 1% of the total number of shares issued, the company’s effective payout ratio reached 30%.