On August 9th, SM Entertainment announced that they would grant 50 shares of the company stock to each of their employees.
SM explained, “In order to motivate future growth and encourage employees who have been so dedicated to the successful implementation of the multi-production system, which is the core strategy of SM 3.0, we will be granting 50 shares of the company stock to most of the employees, excluding executives, through a stock grant”.
The total number of shares to be granted is approximately 28,000, equivalent to 2 billion won.
Unlike stock options, a stock grant involves giving the company shares to the employees free of charge, allowing the employees to directly benefit from any increase in the company’s stock price. This strategy is expected to encourage company growth and employees’ long-term service.
This is the first time since the foundation of SM that the company has granted company shares in the form of a stock grant exclusively to their employees, excluding executives.
Meanwhile, SM plans to cancel 1% of its shares, equivalent to 235,895 shares (approximately 20.73 billion won), to enhance shareholder value. SM stated, “Following the incineration of 241,379 shares in February, this is our additional shareholder return measure after six months. The remaining 460,000 shares will be either used for future growth investments or canceled after further review”.
