Key Takeaways
- Event: On Feb. 25, KT&G’s board announced a plan to cancel all treasury shares held—10,866,189 shares—about 9.5% of KT&G’s shares outstanding;
- Background: Korea’s third amendment to the Commercial Act emphasizes cancelling repurchased shares within one year;
- Next steps: For future stock compensation for employees and executives, KT&G plans to purchase shares directly in the market and dispose of them;
- Shareholders meeting: On March 26, KT&G plans to consider a treasury-share holding and disposal plan, charter revisions, and audit-committee-related agenda items.
2Firsts, February 26, 2026
According to Chosun Biz, KT&G said, while resolving to convene its 39th regular general meeting of shareholders, that it will cancel all treasury shares it currently holds, totaling 10,866,189 shares, or about 9.5% of KT&G’s shares outstanding.
The move reflects the legislative intent of the “third amendment to the Commercial Act,” which has passed a plenary session of Korea’s National Assembly. The amendment centers on mandating the cancellation of treasury shares, requiring companies that repurchase their own shares to cancel them within one year.
KT&G also said that if it uses shares in the future for stock compensation to employees and executives, it will instead purchase shares directly in the market and dispose of them.
In a 2024 disclosure, KT&G presented a corporate-value enhancement plan centered on shareholder returns of KRW 3.7 trillion (about $2.85 billion, calculated at roughly KRW 1,300 per $1) over four years—KRW 2.4 trillion (about $1.85 billion) in dividends plus KRW 1.3 trillion (about $1.00 billion) in treasury-share purchases and cancellations. Since then, from 2024 through last year, KT&G said it returned KRW 1.2 trillion (about $923 million) to shareholders in dividends and carried out treasury-share purchases and cancellations totaling KRW 1.1 trillion (about $846 million), involving 9.05 million shares.
The report also said KT&G has completed the cancellation of 10.1 million treasury shares already held. Including new treasury-share purchases and cancellations, cumulative treasury-share cancellations amount to 14.3% (a total of 19.15 million shares) compared with the number of shares outstanding at the end of 2023.
At the shareholders meeting scheduled for March 26, KT&G plans to submit agenda items including approval of a plan for holding and disposing of treasury shares, 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, considering the intent of the amended Commercial Act focused on protecting minority shareholder rights, KT&G plans to revise its articles of incorporation to allow an integrated cumulative voting system by deleting a provision that had classified the “representative director-president” and other directors into separate groups for the application of cumulative voting.
In addition, the report said the appointment of two new outside directors who will serve on the audit committee (one to be separately elected) and approval of the limit on directors’ remuneration are expected to be submitted as agenda items.
KT&G said that, to actively reflect the intent of the amended Commercial Act, it submitted the cancellation of all treasury shares held as an agenda item for this shareholders meeting, adding that it will continue to work to enhance corporate value and increase shareholder value based on what it described as best-in-class corporate governance competitiveness in Korea.
Cover image source: Chosun Biz
