Star's
strange decision
than it earned
According to my good friend working at The Star, he told me that the company recently celebrated its 43rd
Anniversary celebration in September. Ever since the company announced a one
month ex-gratia bonus on its birthday celebration bash more than a decade ago,
it has always maintained that bonus payment on its every birthday. As a matter
of fact, it has became a norm among staff that a one month ex-gratia bonus is
always there when Star celebrates its' birthday celebration.
This time, my friend did not really enjoy
the food dished out on the celebration day. Why? Well, all good times must come
to an end, sometimes. For the first time, Star did not make any announcement of
a one month ex-gratia bonus payment on that day and up to today, at time of
posting. Most staff were quite shocked and disappointed. This must be the first
time the celebration's "buffet spread" was not really an enjoyable
one.
Days before the birthday celebration,
management had taken the trouble to address the staff about the company's
drastic cost-saving initiatives. Various measures were being implemented such
as scaling down its Sarawak operation, staff VSS, eliminated a top management
post, considering using thinner 42gsm newsprint (vs. 45gsm currently) to lift
yield per ton by 5-6%.
It is believed that Star has also ceased
publishing its business Shanghai and entertainment magazine Faces.
Another reliable source told me that Star
has also not send its non-sales support advertising team for its bi-annual team
building seminar due this year. The last one was held in Bukit Gambang, Pahang
in 2012.
With so many initiatives and measures to
cut cost, employees would be very much in a position to understand and support
the company's moves.
But Star's decision to pay a nine sen
dividend for its 1st Half Year's earnings is rather strange. Star only managed
to earn an earning per share of 7.54 sen. Isn't it better to pay out a maximum
dividend of 7.54 sen or less to its shareholders if the company is in the drive
to cut cost? We all know that in the financial world of survival, do not spend
more than you can earn and you will be quite all right, at least.
Shareholders would happily accept even if a
dividend of 7.54 sen or less is given. But Star is paying out more than it earned. So the
extra money must come out from its coffers. Why pay extra to its shareholders?
To calculate how much Star is paying out, I
am using simple calculation of 9 sen dividend minus 7.54 sen earned for the
first half 2014, there is a extra of 1.46 sen or RM14.60 to be paid out to per
share. Mutiply this RM14.60 by 738,563,602 shares and the amount is a whopping
RM10.7 million plus!
This whopping RM10.7 million plus if
divided equally amongst its 1500 employees (a rough guess) comes to a
RM7,000.00 plus per employee! Imagine how happy employees would be if this
windfall is given to them instead of the shareholders. Motivation to help and
go in line with the company's objectives would be strongly supported by its
employees!
However, it is the shareholders that would
be pleased to receive this "additional" amount of dividend
particularly those several major shareholders. Imagine if you own 51 per cent,
there is an extra of RM5 miliion in dividends! How useful in this times when
prices of everything is up except the stock market!
On one hand, the company tried to share its
cost-cutting initiatives with its loyal employees, on the other hand, it paid
out more money to its shareholders than it earned. See, talking the walk and
walking the talk are seriously hard to understand.
This led me to ask this question : Is Star
interested in taking care of its shareholders rather than its employees?
How would you feel if you are an employee
of The Star?
How would you feel if you happen to be an
employee and as well a shareholder of the company? My dear friend happens to be
an employee and a shareholder as well. This time, he can't really have the best
of both worlds.
As Deepavali is around the corner, Kassim takes
the opportunity to wish all Hindus a Happy Deepavali Day.
I hope to make this occasion a very joyous
one with this message taken from the internet.
May This Diwali be as bright as ever.
May this Diwali bring joy, health and
wealth to you.
May the festival of lights brighten up you
and your near and dear ones lives.
May
this Diwali bring in u the most brightest and choicest happiness
and
love you have ever Wished for.
May
this Diwali bring you the utmost in peace and prosperity.
May
lights triumph over darkness.
May
peace transcend the earth.
May
the spirit of light illuminate the world.
May
the light that we celebrate at Diwali show us the way
and
lead us together on the path of peace
and social harmony
WISH
U A VERY HAPPY DIWALI
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