It is said that you wouldn’t know how much you are really worth until you tender your resignation, as many Hong Kong bosses offer good salary hikes or bonus only when someone has put in his or her papers.
So what can explain why Next Digital chairman Jimmy Lai is being so generous as to give out HK$51 million in company shares to his staff as incentive?
Perhaps, it means the group may be heading toward another crunch time and Lai wants to make sure his staff are on board and sitting on the same ship with him.
Next Digital, which publishes Apple Daily and online Next Magazine in Hong Kong and Taiwan, said it will launch a one-off incentive scheme for 2,485 employees that is equivalent to a bonus of one-month salary.
The listed firm, controlled by its maverick founder Lai, will pay for new subscription stock that will represent 8.41 percent of the existing shares, or 7.76 percent of the total number of shares as enlarged by the issue.
That means HK$51.14 million worth of shares based on yesterday’s closing price of 25 HK cents a share, which was about less than half of the book value of 54 cents.
Despite a respectable hit rate which ranked the group as one of the top news websites in Hong Kong, Next Digital seems to have failed to find the formula to play the digital game in a profitable mode.
Next Digital lost a total of HK$1.2 billion over three years, prompting major shareholder Lai to return as chairman and play Moses to try lead his troops to the red sea.
In this light, giving away shares of Next Digital might help align the interests of employees directly with that of the owner, encouraging the staff to work harder and improve the business.
Although the money is not coming directly from his pocket, Lai is taking a significant hit from the financial gesture given his ownership of the media firm.
Due to the issue of new shares, Lai’s stake will drop to 68.17 percent from 73.46 percent.
As to whether things will really improve at the firm following his return to the chairman’s role, well, that’s another matter!
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