Elliott Management has asked Hyundai Motor to pay more than three times its 2018 net profit in dividends.
According to related industry sources on Feb. 26, Elliott sent a shareholder proposal to Hyundai Motor and Hyundai Mobis last month, which includes an increase in dividends and appointment of outside directors. Elliott's shareholder proposal will be put on the agenda at the shareholders' meeting, which will be held on March 26.
Elliott asked Hyundai to pay 21,967 won per ordinary share as the year-end dividend. This is more than five times the 4,000 won per share offered by Hyundai Motor. The total amount of dividends based on ordinary shares is 4.5 trillion won, and when preferred shares are added together, the total dividend amount is 5.8 trillion won. The company demanded a dividend of 3.5 times its net profit of 1.645 trillion won last year.
Elliott also included a dividend of 26,399 won per share for Hyundai Mobis in its proposal. Based on the total amount, it is 2.5 trillion won, surpassing Hyundai Mobis' 2018 operating profit standing at 2.025 trillion won.
In response, the boards of directors' meeting of Hyundai Motor and Hyundai Mobis said they reject the Elliott's demand, saying that the requested dividends are too excessive and the candidates for outside directors who were recommended by Eliott lack expertise.
Meanwhile, Elliott bought shares of Hyundai Motor and Hyundai Mobis intensively from the end of 2017 ahead of the transfer of the managerial right of Hyundai Motor Group to Chung Eui-sun, executive vice chairman.