KT&G will cancel all of its treasury shares held, totaling about 11 million shares.
According to the industry on the 25th, KT&G held a board meeting at its headquarters in Gangnam-gu, Seoul, this afternoon and, while resolving to convene the 39th regular shareholders meeting, announced a plan to cancel all of its existing treasury shares (10,866,189 shares). This amounts to 9.5% of KT&G's total number of shares outstanding.
This reflects the intent of the "third Commercial Act amendment," centered on mandating the cancellation of treasury shares, which passed the National Assembly's plenary session. The third Commercial Act amendment centers on requiring corporations that acquire their own shares to cancel them within one year.
KT&G also plans, if it uses treasury shares in the future for stock compensation to employees and executives, to purchase shares directly on the market and dispose of them.
In an announcement in 2024, KT&G unveiled a plan to enhance corporate value centered on shareholder returns of 3.7 trillion won over four years (2.4 trillion won in dividends + 1.3 trillion won in treasury share purchases and cancellations). Since then, from 2024 through last year, it returned 1.2 trillion won in dividends to shareholders and carried out treasury share purchases and cancellations totaling 1.1 trillion won (9.05 million shares).
In addition, it has completed the cancellation of 10.1 million treasury shares already held. Including new treasury share purchases and cancellations, the total cancellation of treasury shares is 14.3% (a total of 19.15 million shares) compared with the total number of shares outstanding at the end of 2023.
At the shareholders meeting on the 26th of next month, KT&G plans to submit, in addition to the agenda item to approve the plan for holding and disposing of treasury shares, the approval of the financial statements, partial amendments to the articles of incorporation such as increasing the number of separately elected audit committee members to two, and the appointment of outside directors who will serve on the audit committee.
In particular, in consideration of the intent of the amended Commercial Act focused on protecting minority shareholder rights, it plans to revise the articles of incorporation to allow an integrated cumulative voting system by deleting the provision that had classified the representative director-president and other directors as separate groups for the application of cumulative voting.
In addition, the appointment of two new outside directors who will serve on the audit committee (one to be separately elected) and the approval of the limit on directors' remuneration are expected to be submitted as agenda items.
A KT&G official said, "To actively reflect the intent of the amended Commercial Act, we submitted the cancellation of all treasury shares held as an agenda item for this shareholders meeting," and added, "We will continue to work to enhance corporate value and increase shareholder value, based on Korea's best-in-class corporate governance competitiveness."