Dreams dashed at China.com as workers denied share of spoils
You would think that the 300 or so employees of China.com Corp would be jumping with joy since its public debut on Nasdaq last week and the so-far phenomenal performance of its stock.
But the decision by the mainland Web portal/design firm to give few rank-and-file employees stock options has left most with little to celebrate.
'They gave them to everyone else but the people inside,' one disgruntled employee said.
To motivate their employees to work harder, Silicon Valley start-ups typically grant employees either stock or stock options.
Options - which allow employees to buy stock at a certain price - have enabled thousands of Silicon Valley workers at start-ups such as Yahoo!, Amazon and eBay to live out their dreams of becoming millionaires.
The catch is that employees must typically stay with the firm for a number of years for the stock to 'vest', while in many cases it continues to rise. This promotes employee loyalty.
Not so with China.com, which raised US$84 million last week on Nasdaq but has so far shunned this share-the-wealth philosophy and is suffering high employee turnover and rampant discontent as a result.
Apart from board chairman Raymond Ch'ien, chief executive Peter Yip and five other directors, almost everyone else working for China.com went home from the party empty-handed, sources said.
Mr Ch'ien is a member of the Executive Council and chairs regional conglomerate Inchcape Pacific. Other board members include Zhou Shun Ao, representing China.com stockholder Xinhua News Agency, and Douglas Chan Wing Tak, managing director of New World Infrastructure, which has an 18 per cent stake.
Asia Pacific Online, with a 14.8 per cent stake, is the second-largest shareholder after New World Infrastructure. Asia Pacific Online is owned by a trust and Nicola Chu, Peter Yip's spouse. The seven directors and five executive officers own 20.8 per cent of the company after listing.
Executives such as China.com chief operating officer Peter Hamilton, Web Connection managing director Steven McKay, senior vice-president of marketing and product development Vicky Hung, chief financial officer David Kim and America Online managing director Ian Henry were 'given some, but not great' amounts of stock, a source said.
'It's like the directors were given a bunch of free movie tickets and they just decided to give it to anyone they liked,' said the source.
With 300,000 shares left over to share out, some 'friends' of the board received as many as 5,000 shares. But none appear to have made their way into the hands of any of the lower-level employees.
Pacific Internet, a Singapore ISP which went public in March and also boasts a market capitalisation of about US$1 billion, gave away shares and options to 'less than 2 to 5 per cent' of 300 employees, one former employee said.
Rumours are that longer-serving China.com staff may eventually be given options to buy stock. But turnover remains high and few employees apparently think they will stay long enough to recoup benefits.
