u/Imaginary-City-3007

Korean inheritance tax actually creates a perverse incentive to keep the stock price LOW, not high. This is the part that flips the "buy borrow die" logic on its head. Korea has some of the highest inheritance/gift taxes in the world (up to 60% on major shareholdings), assessed based on market value at time of transfer. Chaebol families have a long, well-documented history of preferring depressed share prices specifically to minimize the tax bill when passing control to the next generation — the opposite of the US "buy borrow die" strategy, where a high, liquid stock price is the asset you borrow against. In Korea, a high stock price is a tax liability at succession, not a borrowing tool.

Executive comp isn't equity-heavy the way it is in the US. Chaebol leadership isn't compensated primarily in stock options/RSUs tied to share price the way US CEOs are, so there's less direct personal financial incentive linking "stock price up" to "my paycheck up."

Put together: the people who actually control SK Hynix's capital allocation decisions don't have their personal wealth linked to the Hynix share price the way a US founder-CEO would, and in some ways they're structurally incentivized toward the opposite. That's the core of the "Korea discount" — control and cash-flow rights are separated in a way that just doesn't exist in most US public companies.

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