Friday, February 04, 2005

Big gift for the executives in China Netcom

A WSJ columnist said on Feb1's paper that the attractive bonus, given by consumer product tycoon P &G, would be one of the incentives for Gillette's chief executive, James M. Kilts, to sell his company. Not only Mr. Kilts, but also other exectutives would be attacted. They may not choose to sell the companies, but via different deals. The lately deal between PCCW and China Netcom has confused some of the analysts, saying that China Netcom had paid a much higher price than PCCW's share indeed worth. But China Netcom's executives might be happy to get some "gifts" from PCCW.

For example, PCCW's future new deputy Chairman from China Netcom Group will get the compensation more than 2.5 times of the total estimated compensation for all the directors in China Netcom BVI( the HK-listed company, controlled by China Netcom Group) , if he can get the same level of compensation as the other PCCW's diretors.

China Netcom said on Jan. 20 that one of its three directors, who will join PCCW's borad, will become a Deputy Chairman of PCCW . According to PCCW's annual report 2003, the compensation for all the top three executives, including the Chairman and the other deputy Chairman is higher than 10,500,000 HK dollars.

In China Netcom BVI's prospertuses last year, it said that the total compensation of all its directors in 2004 will be about 3.8 million yuan, two fifth of the amount PCCW pay the single director.

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