Samsung weighs share buyback to fund employee stock rewards amid AI-driven profit boom

Samsung Electronics said on Wednesday it is considering a share repurchase programme to support stock-based employee compensation linked to its 2026 performance, but stressed that no final decision has been made regarding the timing, scale or structure of any buyback.

The clarification came through a regulatory filing after local media reports claimed the South Korean technology giant planned to repurchase shares worth as much as 90 trillion won ($58.6 billion) beginning next month.

Samsung said discussions regarding a potential buyback remain under review and that specific details have yet to be determined.

The possible share repurchase is linked to a compensation agreement reached last month between management and the company's labour union. Under the deal, Samsung is expected to allocate approximately 10.5% of annual operating profit generated by its semiconductor division towards special employee bonuses paid in the form of company stock.

The arrangement has attracted attention within the company, with some observers raising concerns about compensation disparities between employees in different business units.

Under the agreed structure, workers receiving treasury shares as bonuses will be permitted to sell one-third of their allocation immediately. Another third will become eligible for sale after one year, while the remaining portion can be sold after an additional year.

Samsung may also need additional treasury shares to support a separate long-term incentive programme known as the Performance Stock Unit (PSU), which was introduced in October last year to better align employee compensation with the company's long-term share performance.

The announcement comes as Samsung and domestic rival SK Hynix continue to benefit from strong demand for memory chips driven by the rapid expansion of artificial intelligence technologies.

Industry expectations are that both companies could post record profits this year and next as AI-related demand fuels a supply shortage in memory chips and supports higher pricing across the sector.

Investor enthusiasm was reflected in Samsung's share performance on Wednesday. The company's stock jumped 9.8%, significantly outperforming SK Hynix, which gained 1%.

The rally also allowed Samsung to reclaim its position as South Korea's largest listed company by common-share market capitalisation.

At current exchange rates, the reported 90 trillion won figure would be equivalent to approximately $58.6 billion.