Samsung Electronics pledges to restore profits

Shareholders on Friday promised continuing support for Samsung Electronics despite its slumping profits last year.

The Korean tech giant held an annual shareholders’ meeting at its headquarters in Seocho-dong, Seoul, with some 400 shareholders and investors in attendance.

Despite the company’s dismal profits caused by sluggish device sales, the overall mood among participants seemed upbeat about the company’s future performance. 

The Samsung management also showed a friendlier attitude than usual as all three CEOs made a speech on the performance and strategy of each business division. In previous years, vice chairman Kwon Oh-hyun was the only speaker.

Kwon, who is in charge of the device solutions division, won his second term as an internal director.

“The board members agreed that it would be appropriate to maintain consistency in the company’s management initiative amid the uncertain business environment,” Kwon said of the reelection. His term is three years.

Following the meeting, the company said it had decided to decrease the total remuneration ceiling for registered directors to 39 billion won ($35 million), compared with 48 billion won last year.

While the annual salaries for executives remained the same as last year, long-term performance incentives will be cut in half to 9 billion won.

Kwon added the new executive pay scheme would be reviewed at a special committee consisting of outside directors.

Another CEO, the company’s mobile chief Shin Jong-kyun, hinted at making a big push with the company’s new flagship smartphones Galaxy S6 and its Edge variant to restore profits.

“The new Galaxy S6 and Edge are gaining positive response from media and clients. We will strengthen our readiness before the official launch,” he said.

“In response to the soaring budget phone market, we will adopt high-end features such as metal materials and an active mode organic light-emitting diode (AMOLED) display to secure competitiveness.”

Home appliance chief Yoon Boo-keun pinned high hopes on its new superultrahigh-definition TV in its upscale push in the global smart TV market.

“We will extend premium lineups in other home appliance segments. We will widen the gap with rivals to bolster our market leadership,” he said.

After the event, the three CEOs also shook hands with shareholders, something that was also rarely seen in previous shareholders’ meetings.

On Friday, Samsung said the company logged 206 trillion won in sales and 25 trillion won in profits last year.

By Lee Ji-yoon (jylee@heraldcorp.com)