Following an urge from activist investor Elliott Management Corporation to simplify and split the tech company into two, Samsung Electronics confirmed today that it is now considering “creating a holding company structure”.
The 47-year-old company revealed a detailed “roadmap of actions” today, in which it will retain external advisors to conduct a thorough review of the optimal corporate structure.
The process is expected to take as long as six months, and “the review does not indicate the management or the Board’s intention one way or another”, Samsung said.
The company also announces plans to nominate at least one “independent” new Board member “with robust global C-suite experience” for approval at the next annual shareholder meeting in March 2017.
In the statement, changes to the Shareholder Return Program were also introduced, in which Samsung would pay out half of its free cash flow to shareholders for 2016 and 2017 and raise the dividend for 2016 by 36% compared to the previous year.
Samsung has been facing criticism since the Galaxy Note 7 fiasco in early September. In October, Elliott, which owns about 0.62% of Samsung, released a 10-page letter and 31-slide deck publicly, and urged Samsung to streamline and separate into two, conduct a tender, dual-list its resulting operating company on a U.S. exchange, pay shareholders a special dividend of 30 trillion Korean won as well as ongoing regular dividends, and improve governance by adding three independent board members.
International investors own almost 60% of Samsung, and two-thirds of the company’s shareholders would have to vote in favor of the sweeping restructure.