Samsung names new executives for business divisions

  • Samsung names new executives for business divisions

Samsung names new executives for business divisions

Kwon, Yoon and Shin will remain as members of the board until March.

Samsung Electronics logged a record profit of $10.0 billion for the third quarter and announced a sweeping reshuffle of its top management on Tuesday, seeking to maintain its lead while its heir is in prison.

Kim Ki-nam, 59, was controlling the Device Solutions division which develops components such as memory chips. Perhaps the most interesting change comes in the IT & Mobile Communications division, whose new leader is DJ Koh, the past head of the company's mobile communications business.

To respond to a surge in demand for memory chips that power data centers and mobile devices, Samsung is spending 46.2 trillion won ($41.1 billion) in capital expenditure this year, including 29.5 trillion won to increase output of chips.

It also announced a shareholder return policy for the next three years, ramping up returns guidance to a level higher than its current range of 30-50 percent of free cash flow to 50 percent over three years.

Apple Inc has paid almost 22 cents for every dollar it earned over the past five years, while Microsoft Corp has shared 53 cents.

South Korean family-run business empires like Samsung Group have a reputation for low dividend payouts and other governance practices that favour controlling shareholders at the expense of ordinary investors.

Samsung Electronics shares were down 0.7 percent soon after the earnings release, while the Kospi benchmark share price index was flat.

And if the company's record second quarter operating income of $12.7 billion wasn't impressive enough on its own, its Q3 2017 profits have actually managed to surpass that number, though the difference is a relatively slim $200 million.

Looking ahead, Samsung's component business, especially its memory chips and advanced flexible displays called OLED, will drive the improvement of its financial performance during the fourth quarter and next year, Samsung said.