The outfit replaced the leaders of its three main businesses, named CFO Lee Sang-hoon as the likely new board chairman, and said veteran co-CEOs J.K. Shin and Yoon Boo-keun would resign.
The shake-up at South Korea’s biggest company is designed to ease investors’ concerns about a leadership vacuum following the arrest and conviction of group scion Jay Y. Lee on bribery charges earlier this year.
The new appointees are all long-serving Samsung insiders whose elevations suggest continuity rather than much new.
Kim Ki-nam, 59, was appointed to lead the Device Solutions division which makes components including memory chips, the major driver of the firm’s record third quarter profit of 14.5 trillion won ($12.91 billion).
Park Jung-hoon, a fund manager at HDC Asset Management which holds Samsung Electronics shares, said there had been “some concerns” that Kim would move to expand chip capacity and upset the currently favourable supply-demand balance.
“However, today’s (post-earnings call with analysts) said the chips business will focus on profitability, not market share - suggesting they will continue the current course without deviation, which put our minds to rest”, he told Reuters.
Samsung said Koh Dong-jin, 56, would head IT and Mobile Communications, and Kim Hyun-suk, 56, would lead Consumer Electronics. The changes were effective immediately.
Samsung said it would double dividends next year and keep them at that level until 2020, as it responds to investor pressure to share its vast cash reserves.
It also said 2017 capital expenditure would be its biggest ever, climbing 81 percent to ($41 billion as it builds new chip factories and cleanrooms to stay ahead of demand for servers and devices with ever greater memory.
Third quarter operating profit nearly tripled from the same period a year earlier, matching Samsung’s earlier estimate. Revenue jumped 29.8 percent to 62 trillion won, also in line with its earlier estimate.
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 said the earnings outlook was positive with the chips market likely to “remain favourable” in 2018.