Key executives from major South Korean corporations, including Samsung Electronics, Naver, and Lotte Group, have been making significant stock purchases in recent months, drawing attention as their companies face stock price declines and increasing pressure to prioritize shareholder interests.
Samsung Electronics announced on Sept. 10 that President Roh Tae-moon purchased 5,000 shares of the company’s stock, valued at approximately 347.5 million won ($259,310). This follows his earlier purchase of 5,000 shares in early June, bringing his total investment in company stock to around $533,500 over the past three months.
Also previously on Sept. 5, Vice Chairman Han Jong-hee bought 10,000 shares for about $551,400, and Vice Chairman Jun Young-hyun purchased 5,000 shares in June for $280,500. In total, over the past three months, approximately 30 executives at Samsung Electronics have bought around 75,000 shares, worth $4.1 million.
As the company’s stock price hit its lowest closing price of the year on Sept. 10, lingering at the $44.70 level, the executives’ stock purchases have garnered significant market attention.
This trend is not limited to Samsung Electronics. Across industries, key executives at S. Korean major corporations have been actively buying their company’s stock.
For instance, on Sept. 6, Naver CEO Choi Soo-yeon purchased 1,244 shares, worth around $149,200, and Shin Yoo-yeol, Executive Director and son of Lotte Group Chairman Shin Dong-bin, also bought approximately $223,860 worth of stock in a short period. Executives from companies such as SK Hynix, Hyundai Mobis, and Kakao have similarly purchased shares worth around 100 million won.
While it is not uncommon for executives to purchase company stock during periods of declining stock prices to stabilize the market, some in the business community speculate that recent actions by the government and parliament may have influenced these stock purchases. The government is working on revising the Commercial Act to protect small shareholders better, while the opposition party has proposed around ten related amendments. This has put additional pressure on companies to demonstrate they are prioritizing shareholder interests.
Doosan Group, for example, recently withdrew its plan to merge Doosan Bobcat and Doosan Robotics after facing shareholder backlash, signaling a broader shift in corporate strategies to avoid neglecting shareholder interests. As a result, many companies may feel compelled to act, and buying company stock is seen as part of this effort.
A business insider noted, “In order for companies to raise their stock prices through higher dividends or canceling shares, they need to have a lot of cash on hand. However, with the current weak economy, only a few companies have enough cash to do that. While it’s important to take care of shareholders now, companies also need to focus on their main business to grow their value in the long run.”
