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Samuel Yeung

Garment retailer Giordano International reduced its directors' pay by 23.33 per cent last year, though profit increased 15.55 per cent in the period.

According to the company's annual report, the pay packets of its 10 directors fell to HK$23 million from HK$30 million the previous year.

Executive director Terry Ng Sze-yuen said the decrease was partly because director Peter Lau Kwok-kuen gave up part of his salary in the year.

The departure of one high-paid director, who received about HK$13.5 million the previous year, also contributed to the decrease.

Another senior executive, who was not among the directors, was introduced in the year - receiving only HK$2 million.

The pay shrinkage is a sharp contrast to pay-outs at Pacific Century CyberWorks last year.

The telecoms firm raised the pay of its 16 directors almost 55 times to HK$768 million from HK$14 million for 19 directors the previous year.

In the year, CyberWorks sank into the red, posting a loss of HK$6.9 billion - one of the biggest losses in Hong Kong's corporate history.

Giordano's widely held shareholding structure is believed to be a reason for the company exercising more self discipline over its management pay.

Mr Ng said the company was one of only two locally listed companies without a single controlling shareholder.

According to information issued by HSBC Broking, Harris Associates is the largest shareholder with 9.47 per cent of the company, lower than the 10 per cent threshold which could be defined as a substantial holding under present regulations.

Analysts point out that such a shareholding structure could enhance the checks and balances between a company's management and ownership.

Meanwhile, Mr Ng said that in the coming years more emphasis would be put on Germany and Japan as the company expands overseas.

In Germany, the company has six outlets and planned to open another 30 with an investment of about six million euros (HK$41.7 million), he said.

Recently, the company also opened its first shop in Osaka, Japan.

'The outlet is expected to break even in 2002,' Mr Ng said. 'We are seeking more retail outlets in Osaka and Tokyo.'

Regarding the underperforming Taiwan market, a comparatively conservative strategy would be applied.

'We have cut down our Taiwan outlets from 200 to 160 in the past three years,' Mr Ng said.

The company would also conduct more domestic raw material purchases in a bid to hedge the negative effects arising from a weak Taiwanese currency.

Partly due to a weak Taiwan dollar, Giordano's net sales in Taiwan decreased 8.6 per cent to HK$5.5 billion last year.



Self-discipline believed behind efforts to cut back salaries despite 15pc rise in profits