Increasing global demand for K-beauty products improved the industry’s performance last year, helping owners of Korean cosmetics firms earn large cash dividends.
Of the top 10 cosmetics firms listed on the stock market, eight chose to pay dividends according to the Financial Supervisory Service last Thursday.
While returning company profits to shareholders by paying high cash dividends has its merits, it is also criticized for increasing the wealth of owner families.
AmorePacific Group chairman Suh Kyung-bae collected dividends from two listed firms -- AmoreG and AmorePacific -- worth a total of 25.7 billion won ($22 million), which is over 20 percent of the total company cash dividends of 125.6 billion won.
AmoreG’s dividend payout ratio was 4.8 percent, not even half of the average payout ratio of 16 percent to 17 percent. The ratio, which refers to the percentage of earnings paid to shareholders in dividends, provides an indication of how much money a company is returning to shareholders. Therefore, AmoreG paid a cash dividend of 390 won per common stock, amounting to a total of 32.5 billion won, and holding a 55.7 percent stake, chairman Suh took over half the amount with 17.3 billion won.
In deciding on a payout ratio of 15.9 percent to pay 1,350 won per share as cash dividends, AmorePacific paid a total of 93.1 billion won. Accordingly, Suh received 8.4 billion won in cash dividends as he holds a 10.7 percent stake in the company.
His oldest daughter Suh Min-jung, holding a 26.5 percent stake and 0.01 percent stake in AmoreG and AmorePacific, respectively, received a total of 940 million won in cash dividends without even participating in management.
Going public last year, cosmetics company It’s Skin saw its best performance to date by earning a total net profit of 83.6 billion won in 2015. The company, therefore, decided on a payout ratio of 20 percent and awarded dividends of 1,919 won per share for a total of 16.7 billion won.
Holding 14.7 percent of It’s Skin company shares, Hanbul Cosmetics chairman Im Byung-chul gained 2.4 billion won in dividends, and his two sons -- each holding a 4.3 percent stake -- both gained over 700 million won in cash dividends.
Furthermore, It’s Skin’s largest shareholder with a 50.4 percent stake is Hanbul Cosmetics which is 100 percent owned by Im’s family. Hence the dividends entitled to Hanbul Cosmetics, worth over 8 billion won, will be transferred to his family.
The operator of cosmetics companies Missha and A’pieu, Able C&C allocated 300 won per share for a total of 4.1 billion won. With a 29.2 percent stake, Able C&C chairman Seo Young-pil earned 1.2 billion won.
Entering the stock market last year, TonyMoly decided on a payout ratio of 26.3 percent to distribute 300 won per share, which amounted to a total of 3.5 billion won, and TonyMoly chairman Bae Hae-dong’s inner family gained a total 2.2 billion won through company dividends. As the company’s largest shareholder, he earned 1 billion won through his 30.9 percent stake, and his wife earned 600 million won through her 17 percent stake. Additionally, his two children -- each holding 8.5 percent stake -- both gained 300 million won.
Cosmetics developing manufacturer Kolmar Korea decided on a low payout rate of 9.3 percent to distribute 200 won per share that amounted to a total of 4.2 billion won. Kolmar Korea chairman Yoon Dong-han received 15.8 million won in cash dividends due to his 0.38 percent stake.
Moreover, Kolmar Korea Holdings owns 21.7 percent shares of Kolmar Korea, and the chairman’s family holds more than 49 percent of the holding company shares, indicating a further boost in his wealth. Chairman Yoon holds 40.3 percent while his son and vice president of Kolmar Korea Yoon Sang-hyun holds 8.7 percent stake.
Furthermore, LG Household & Health Care and cosmetics developer Cosmax decided on a payout ratio of 19.6 percent and 33.3 percent, respectively, distributing 5,500 won and 700 won per share as cash dividends. Their total cash dividends amounted to 92.2 billion won and 6.3 billion won, respectively. LG Household & Health Care vice chairman Cha Suk-yong received 55 million won in cash dividends holding a 0.48 percent stake.
Meanwhile, Hankook Cosmetics and Hankook Cosmetics Manufacturing did not distribute cash dividends as both are financially struggling due to stagnant business.
By The Korea Herald Superrich Team (
seoyounglee@heraldcorp.com)
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Hong Seung-wan
Cheon Ye-seon
Seo Jee-yeon
Yoon Hyun-jong
Min Sang-seek
Lee Seo-young
