23 October 2016
HSBC chief executive Stuart Gulliver, Lam Yat-yan and David Beckham have one thing in common -- they are money spinners. But guess who makes the most? Photos: Bloomberg, Facebook, CNSA
HSBC chief executive Stuart Gulliver, Lam Yat-yan and David Beckham have one thing in common -- they are money spinners. But guess who makes the most? Photos: Bloomberg, Facebook, CNSA

Why Lam Yat-yan is walking away from a US$10 mln pay day

Thanks to Modern Education, we know now that a star tutor can make a lot more money than a football superstar.

If Lam Yat-yan wants to, he can put David Beckham to shame in earnings and end up just a tad below HSBC chief executive Stuart Gulliver.

But that’s if he decides to heed a couple of full-page newspaper advertisements inviting him to join Modern Education for HK$85 million (US$10.97 million) a year.   

Not that he is being stiffed by his present employer, Beacon College, which already pays him millions.

Modern’s jaw-dropping offer is a 125 percent premium to the HK$35.5 million the star Chinese language tutor is making at Beacon.

Apparently, Lam already has singlehandedly brought in 40 percent of Beacon’s turnover of HK$327.8 million this year with three months to go.

The open offer puts Beacon on the spot because it flags to investors how much it relies on a single teacher for revenue.

Lam’s contract with Beacon expires next summer.

Should Beacon decide to match Modern’s offer, it would mean at least a HK$40 million hit to its bottom line.

Because Beacon is in the process of listing on the stock exchange, it’s extremely important to make its highest earning teacher happy.

In a Facebook post last night, Lam appeared to turn down Modern’s offer and stick with Beacon.

“For a long time, the school and I have maintained a good relationship, and together, we have built an ideal teaching platform,” he wrote.

“Therefore, under a fair and reasonable working environment, I am willing to continue to work here. I believe I can support myself and my family so it makes no difference to me whether I have HK$50 million or HK$80 million more.”

Lam is poised to become one of the highest paid executives in any Hong Kong-listed company.

CKH Holdings co-managing director Canning Fok Kin-ning, nicknamed “working king”, the highest paid Hong Kong executive in the past 20 years, made close to HK$197 million in 2014.

Lenovo chairman and chief executive Yang Yuanqing pocketed HK$151 million.

But HSBC honcho Stuart Gulliver would be slightly better off than Lam with the HK$90 million he bagged last year if the star tutor joined Modern.

All that money up for grabs for Lam would overshadow the HK$60 million Beckham will receive in a five-year endorsement deal with the upscale London haberdashers Kent & Curwen, which works out to HK$12 million a year.

Lam charges HK$456 per four sessions in his Chinese language classes of about 20,000 students.

That’s one-third of Beacon’s student population of 62,000-strong, or about one-sixth of all secondary students in Hong Kong.

In a city infatuated with after-school tutorials, Modern Education became the first listed company of its kind four years ago.

But its major shareholder cashed out after a year when the tuition business was hurt by a falloff in enrolment numbers.

Despite the huge profits of their underlying companies, education stocks are probably not a good long-term investment.

A year ago, SDM Group, a jazz and ballet academy for children, was listed at HK$1.50 per share.

The stock was up as much as 10 times on its debut but fell below its IPO price within six weeks and is still under water.

– Contact us at [email protected]


Why this Hong Kong tutor is worth 22 Barack Obamas

EJ Insight writer

EJI Weekly Newsletter