Friday, November 12, 2010

Worth over a hundred millions, and get paid in tens of millions a year

1. Is it possible to be millionaires from employment?

2. How about getting paid in millions a year from employment?

3. How about getting paid in millions a year before 40 years old and worth at least 100 millions in Net Worth purely from employment, and that company doesn't belong to your parents (or relatives) ?

Take a look at Value Partners Group. In the year 2007, the executive directors of the company (with their age) is as below:

- Cheah Cheng Hye, aged 54
- Law Ka Kin, aged 47
- Ho Man Kei, aged 41
- Choi Nga Chung, aged 36
- Ngan Wai Wah, aged 34
- Renee Hung Yeuk Yan, aged 33
- Louis So Chun Ki, aged 32

Below is their total compensation for the year 2006 and 2007.

Compensation and Benefits of Executive Directors for the year ending 31st Dec 2006

Compensation and Benefits of Executive Directors for the year ending 31st Dec 2007

Their annual salary is slightly above HK$ 1 million (about RM 440k) , but look at their bonus (for year 2006 and year 2007)!

In 2007, 5 of the Directors were paid about HK$ 40 Million plus (about RM 18 Million), while Cheah Cheng Hye was paid HK$ 234 Million (about RM 103 Million) !

How are they paid so high? There's a quote that says, "The best way to get what you want, is to deserve it."

Do they deserve to get paid so high?
Value Partners manage Value Partners Classic Fund, which have gained 2,173.0% from 1st April 1993 up to 29th October 2010, an annualized return of 19.4% over 17+ years! They manage USD 4.5 Billion and USD 7.3 Billion for the year ending 2006 and 2007 while earning 41.8% and 41.1% for their Classic Fund investors (A Units) for the year 2006 and 2007.

Since they add value to their fund investors, i believe they deserve such high pay (they're paid 1.25% management fee + 15% performance fee).

And how much are they worth in Assets?

At the end of 2007, the each share is priced at HK$ 7.63 (about RM 3.3572), while as of this posting (12th Nov 2010), the share is priced at HK$ 7.27 (about RM 2.908). So, they're worth above RM 100 Million each (except for Mr. Law, who joins the company only in the December 2004).

Cheah Cheng Hye is a Billionaire in HK$ as well as in RM. And he's a Malaysian (Penangite, and an old frees, not to mention he's also one of the top chess player in Penang Free School back then.)

Source of the information: 2007 Annual Report of Value Partners Group
Value Partners Group's Website
Value Partners Classic Fund
Value Partners Investment Philosophies