Samsung Electronics to Dispose of KRW 175.2 Billion in Treasury Shares... Performance Incentives Granted to Over 1,000 Executives

Disposal of 1,152,022 Treasury Shares
Agreed Under Last Year's Over-achievement Performance Incentive
1,051 Samsung Electronics Executives to Receive Shares

Samsung Electronics will grant approximately 1.15 million shares of its own stock to over 1,000 Samsung Electronics executives, including Jun Younghyun, Head of the Device Solutions (DS) Division and Vice Chairman, as part of last year's Outperformance Incentive (OPI) program.

On January 26, Samsung Electronics announced that it would dispose of 1,152,022 treasury shares for executive performance compensation.

The total amount is 175,222,546,200 won (at 152,100 won per common share), and the recipients are 1,051 Samsung Electronics executives.

Samsung Electronics explained that the purpose of the disposal is "to strengthen responsible management among executives and to motivate the creation of long-term performance by granting the agreed number of treasury shares as part of the 2024 Outperformance Incentive (OPI)."

The OPI system is an annual program that, when a business unit exceeds its targets set at the beginning of the year, grants up to 50% of an individual's annual salary, within a limit of 20% of the excess profit.

Samsung Electronics Seocho Building, Yonhap News

In January of last year, Samsung Electronics introduced a stock compensation system that grants part of the OPI to executives in the form of company shares, as part of efforts to strengthen responsible management.

Under this system, executive directors receive at least 50% of their incentive in shares, executive vice presidents receive at least 70%, presidents receive at least 80%, and registered executives receive 100% in company shares one year later.

The system also stipulates that if the share price remains the same or rises after one year, the agreed number of shares will be granted, but if the share price falls, the number of shares granted will be reduced in proportion to the decline.

Additionally, executive vice presidents and below are prohibited from selling the granted shares for one year from the payment date, while presidents are restricted for two years. Based on the grant agreement date, executive directors and executive vice presidents are restricted from selling for two years, and presidents for three years.

The treasury shares granted this time pertain to the 2024 OPI agreements made by executives in January of last year. Of the shares to be disposed, 166,136 shares (subject to a two-year lock-up for presidents) and 847,528 shares (subject to a one-year lock-up for executive vice presidents and below) are subject to sale restrictions.

Samsung Electronics stated, "The shares to be disposed represent approximately 0.019% of the total number of issued shares (5,919,637,922 common shares), and the dilution effect on share value will be negligible."