Hon Hai to issue over NT$10 billion in bonuses to employees

2018/05/14 16:16:14 fontsize-small fontsize-default fontsize-big
Hon Hai to issue over NT$10 billion in bonuses to employees

Taipei, May 14 (CNA) Taiwan-based Hon Hai Precision Industry Co., the world's largest contract electronics maker, said Monday it will issue more than NT$10 billion (US$336 million) in bonuses to employees.

The bonus payout proposal was approved at a board meeting held on May 11, but still has to be approved by shareholders at the upcoming annual general meeting scheduled for June.

Based on an annual report released last year, Hon Hai, also known as Foxconn on the global market, has 7,510 employees in Taiwan. They are expected to receive an average NT$1.36 million under the bonus payout plan.

The actual bonus payment for Hon Hai employees will depend on their position, seniority, performance and other considerations, sources close to Hon Hai said.

In addition to the 7,510 employees in Taiwan, Hon Hai and its subsidiaries have a global workforce of 618,400, including 473,900 production line workers as of the end of April 2017, according to the annual report.

The bonus payout plan came after the same board meeting approved proposals for Hon Hai to cut its paid-in capital by 20 percent to return NT$2 per share to shareholders and to issue NT$2 per share as a cash dividend for shareholders, after earnings per share of NT$8.01 in 2017.

After the capital reduction, Hon Hai's paid-in capital will be cut by NT$34.66 billion to NT$138.63 billion in a bid to boost its return on equity as well as EPS, at a time when contract electronics makers face depressed profit margins.

The capital reduction and the cash dividend payout plans, which also require shareholder approval, are expected to pay shareholders NT$4 for every share they hold.

As a result, Terry Gou (郭台銘), chairman of Hon Hai, is expected to receive a total of NT$6.48 billion in cash as he owns about 1.62 billion Hon Hai shares.

In the wake of the capital reduction plan, shares in Hon Hai rose 4.71 percent to close at NT$89.00 with 127.97 million shares changing hands on the Taiwan Stock Exchange, where the weighted index ended up 0.86 percent at 10,952.39 on Monday, dealers said.

The strong gains also reflected approval from the China Securities Regulatory Commission (CSRC) on Friday for Hon Hai Internet-focused unit Foxconn Industrial Internet Co. Ltd. (FII) to launch an initial public offering in Shanghai, dealers added.

The FII listing, which is being closely watched by the market, could take place at the end of May or early June.

(By Chung Jung-feng and Frances Huang)
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