LG Corp. disclosed on the 22nd that, to enhance shareholder value, it decided to cancel all 3,029,581 shares of treasury common stock acquired within the scope of distributable income.

This amounts to 1.96% of all issued common shares, and based on the closing price on the 22nd, the value of the treasury shares to be canceled is about 350 billion won. The planned cancellation amount is about 250 billion won, the accounting book value calculated using the average acquisition price of 82,520 won per share. The cancellation date is the 28th.

LG Electronics headquarters, the LG Twin Towers building in Yeouido, Seoul. /Courtesy of LG Electronics

Canceling treasury shares is the permanent elimination of shares the company has already acquired. By reducing the number of shares outstanding, it increases earnings per share (EPS), and along with dividends is regarded as one of the representative shareholder-return policies.

Earlier, last year LG Corp. canceled half of its existing treasury shares (6,059,161 common shares) and said it would cancel all remaining treasury shares within the first half of this year.

LG Corp. plans to consider using part of the surplus cash remaining after executing funds for dividends and investments from one-time non-operating gains and regularly occurring profits as resources for treasury share repurchases going forward.

Last year, LG Corp. raised the lower bound of its payout ratio based on separate adjusted net income to 60% from the previous 50%. The company's 2025 payout ratio was 68%, meeting the requirements for separate taxation of dividend income from high-dividend corporations. The five-year (2021–2025) average payout ratio is around 69%, maintaining a high-dividend policy stance.

LG Corp. aims to raise its return on equity (ROE) on a consolidation basis to the 8%–10% range by 2027. ROE, calculated by dividing net income by total equity, is a key profitability indicator showing how much profit corporations generate from their equity.

A company official said, "LG will focus investment on high-growth areas such as ABC (AI, bio, cleantech), which it has identified as the group's future growth engines, to raise LG's future value."

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