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More than 40% of South Korea's gross domestic product (GDP) is comprised of a handful of large and prominent multinational companies, which are largely owned by a few extremely influential families known as chaebols. The Lee family is the chaebol behind Samsung Electronics (OTC:SSNL.F), but others are involved.
Most individuals are likely familiar with Samsung Electronics and may even own a Samsung electronic device, such as a phone or television. Samsung Electronics is a publicly traded company and a favorite tech stock among investors. However, Samsung Electronics is just one piece of the Samsung Group, which functions more like a tightly held business empire than a traditional Western corporation.
The Samsung Group comprises dozens of affiliated companies, including Samsung Electronics (the crown jewel), Samsung Life Insurance, Samsung C&T (construction and trading), Samsung SDS (IT services), and Samsung Biologics. These entities are linked by cross-shareholdings, with control concentrated in the hands of the founding Lee family.
Samsung's shareholding structure is fragmented and complicated, but the control element of the company is not. The Lee family, descendants of its legendary founder, Lee Byung-chul, still maintains power by controlling the individual companies within the complex web of Samsung Group's ownership.
The Lee family has a significant amount of influence in Samsung C&T, which owns part of Samsung Life Insurance, which in turn holds a large stake in Samsung Electronics. These cross-holding structures enable the Lee family to maintain control, even though their direct ownership may be small.
Here is a breakdown of Samsung Electronics' shareholding structure and the top individual and institutional shareholders.
Most of the largest individual shareholders are made up of the Lee family's network and its descendants. Below are the top individual shareholders at the time of this writing.
1. Hong Ra-hee
2. Lee Jae-yong
3. Lee Boo-jin
4. Lee Seo-hyun
5. Hong Namkoong
The institutional shareholders of Samsung are a combination of other companies owned by the Lee family, as well as the Korean government, and name-brand U.S. financial institutions. Below is a breakdown of the top five.
1. Samsung Life Insurance
2. National Pension Service (NPS) of South Korea
3. Samsung C&T Corporation
4. BlackRock
5. The Vanguard Group
Shares Owned: 219,400,334 shares, approximately 3.03% of common stock
Background: Vanguard is one of the world's largest investment management companies, known for its index funds and exchange-traded funds (ETFs). Its stake in Samsung Electronics reflects its commitment to investing in high-performing global brands.
The board of directors of Samsung Electronics is a similar mix of people with various skills and backgrounds, just like any other intelligently put-together board. The board includes company veterans, government regulators, legal experts, and academics. While the Lee family doesn't dominate the board on paper, their influence still echoes throughout the company.
Here are some key members of the board:
Assuming your brokerage offers trading in over-the-counter (OTC) stocks, it's easy to invest in Samsung. Here's a step-by-step guide to buying stocks:
You can also look at ETFs to gain exposure to Samsung. Good places to start might be funds that track South Korea or emerging markets. Examples include:
Because Samsung is such a dominant part of Korea's economy, it often appears near the top of any fund with "South Korea" in its name.
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