Dividend Decision Process Comparison

■ (Korea vs. the U.S.) Dividend Decision Process Comparison

Korean companies generally pay dividends to stockholders at the end of the fiscal year. The timing of deciding whether to pay or not is finalized at the general shareholders' meeting after the end of the fiscal year.

To put it simply, dividends are paid to those who have been confirmed as shareholders at the end of December 31, 2024, and the timing of the decision to pay or not is usually determined at the general shareholders' meeting held at the end of March 2025. And the deposit is usually made in late April. Foreign shareholders concentrate their dividend payments to their home country at the end of April. At this time, the demand for dollar exchange increases rapidly, affecting the exchange rate.

As a result, dividend investment will be made at the end of December, when it is very unclear whether or not to pay dividends, and uncertainty about dividends is quite high. In addition, non-shareholders are often paid dividends. Even if you are a shareholder at the end of December and sell it between January and March, you will be eligible for dividends.

U.S. companies are determined and announced by the board of directors, and pay dividends to shareholders who hold shares on a future date rather than at the time of presentation.

For example, when making a decision to pay dividends on May 13, it announces, "Dividends will be paid on June 10 to shareholders who hold stocks at the end of May after 2-3 weeks of major changes."  

Therefore, when an unexpected dividend payment decision is announced, the stock price usually surges by 5-10% at that moment.

Which is more reasonable, South Korea or the United States?

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