The equity stakes held by South Korea’s top conglomerate families, also known as ‘Chaebols’, have steadily declined over the past decade, as generational transitions and business expansions have reshaped ownership dynamics.
According to data from Chaebol.com, a site that tracks the financial activities of S. Korea’s largest conglomerates, the combined equity stake of the owner families of the top 10 conglomerates by assets fell from an average of 3.93% at the end of 2013 to 3.38% at the end of last year, a decrease of 0.55 percentage points.
During the same period, the heads’ stakes decreased from an average of 1.55% to 1.39%, a drop of 0.16 percentage points, while the stake held by their relatives fell from 2.39% to 2.00%, down by 0.39 percentage points.
It appears that most conglomerates which have completed the process of transferring leadership or ownership from one generation to the next have experienced a decline in the family’s overall stake in the business.
“For example, the Samsung Group’s owner family held a 1.25% stake in 2013, but this dropped to 1.02% by the end of last year after the inheritance process was completed. This decline is likely due to some family members selling their shares during the transfer of the late Chairman Lee Kun-hee’s holdings.
The company’s expansion, which increased its capital, may have also played a role. Lee Jae-yong, the current chairman, held a 0.56% stake at the end of last year, a decrease of 0.13 percentage points compared to the 0.69% stake his father, Chairman Lee Kun-hee, held in 2013.
Similarly, in the LG Group, after the passing of Chairman Koo Bon-moo, the owner family’s stake dropped from 3.9% to 2.25% following the inheritance of shares. However, current Chairman Koo Kwang-mo’s stake increased to 1.72%, which is 0.36 percentage points higher than Koo Bon-moo’s 1.36% in 2013.
Meanwhile, the stake held by other family members fell significantly from 2.54% to 0.53%, largely due to share sales related to inheritance tax payments and the division of group businesses.
In the case of the Lotte Group, although the head of the family’s stake rose sharply from 0.05% to 0.93%, the stake held by relatives dropped significantly from 2.37% to 0.46%. As a result, the total family stake decreased from 2.42% to 1.40%, a decline of 1.02 percentage points. This drop in relatives’ ownership is thought to be due to the sale of shares during inheritance proceedings and conflicts among family members.
