• 
• 

Published on December 28, 2007

Most Thai employees have seen their 2007 bonuses slashed or at best maintained at the 2006 level, reflecting the lacklustre economy throughout the past year, according to a survey by The Nation.

From the survey, LPN Development will pay the highest bonus ratio, equivalent to 8.5 months of salary. However, due to lower housing demand and sales which dampened the company's net profits, the ratio was cut from nine months last year. Employees at Asian Property Development are also tipped to receive a bonus of four or five months, compared to six months last year.

In the property sector, TCC Capital Land is exceptional. Thanks to the continued expansion of the property development arm of liquor tycoon Charoen Sirivadhanabhakdi, this year the bonus has increased by one month to four.

Personnel Management Association of Thailand president Chatphong Wongsuk said the average bonus payment this year was unchanged from last year - at 1.36 months of salary - because of economic conditions.

The top five sectors are also unchanged. Companies in the automobile industry still have the highest payment ratio, averaging 2.83 months compared to 2.28 months last year. Trailing are those in the insurance sector, two months against 1.5 months last year. Consumer goods manufacturers are ranked third with an average bonus of 1.83 months, up from 1.5 months last year.

"Banks and other financial institutions also remain in the top five," Chatphong said.

In The Nation survey, PTT - the country's largest oil and gas company which benefits hugely from high energy prices - is paying six months' salary as its 2007 bonus, unchanged from the previous year and in line with its financial results.

In the first nine months, PTT's net profit was Bt73 billion, or 70 per cent of its annualised 2006 figure of Bt95 billion.

"At PTT, a fixed bonus of one to three months is payable in December and a variable bonus of two to three months would be paid in March. Totally, it will not exceed six months, depending on the performance at the organisational level and personal level," PTT human resources director Suphan Kittithorn said at a recent seminar.

Banpu's employees have high hopes for a bigger bonus this year, due to the company's outstanding performance. Banpu's nine-month net profit of Bt4.7 billion already surpassed its annualised 2006 figures. Last year, the coal company paid three months' bonus.

Most companies are maintaining their bonus ratio. It is seven months at Toyota Motor Thailand despite negative factors that have hurt domestic demand for vehicles. Total Access Communication maintains its ratio at four months, as well as Thai Airways International - at three months.

In stark contrast, following the high operating costs of Suvarnabhumi Airport and a dispute with King Power International which bars Airports of Thailand from receiving revenue from duty-free shops and commercial areas, AOT's bonus this year has been cut sharply from nine months to 3.5.

At Siam Cement Group, comprising over 100 companies and more than 20,000 employees, the bonus is equivalent to two to six months depending on the respective industries.

"In each business unit, employees also receive different amounts, depending on the departments they are in. The bonus of those in the back office could be the lowest," said an employee who asked not to be named.

At SCG Paper, which suffered a 33-per-cent drop in operating profit in the first nine months of the year because of the rising cost of key raw materials, the bonus this year will be equivalent to 3.25 months' salary, compared to 3.9 last year.

Sony Thai employees are satisfied that their bonuses this year will be maintained at last year's level, given the slumping demand that has hurt sales of electrical appliances. At Sony, bonuses depend on annual financial performance and personal performance. Therefore, the bonus paid out to an A-rated employee this year may not be as high as the sum paid out to others of a similar rating in a prosperous year.

According to Chartchai Norasethaporn, executive vice president for human resources of Central Marketing Group with 30,000 employees, bonus payments are based on economic growth, inflation, the unemployment rate and minimum wage.

Journalists have also suffered from the poor economy. As advertisers focus more on below-the-line activities than newspaper advertising, most companies have suffered from lower ad revenue.

The bonus payments of Post Today, The Nation, Prachachart Thurakit and Thai Rath remain unchanged at two weeks, one month, 2.5 months and six months, respectively. Matichon is paying 3.5 months against 5.5 months last year, while the Daily News' pay-out is 4.6 months against five.

Several companies plan to announce their 2007 bonuses next year, including Advanced Info Service which paid three months last year, True Corp (one month), Kasikornbank (3.5 months) and Ch Karnchang (five months).

Paying four months in past years, Krung Thai Bank has recently included the bonus into salaries. Still, it offers special benefits to employees in line with financial performance. Last year, the benefits were equivalent to 1.5-2.5 months.

Securities companies, which prior to the 1997 financial crisis topped the chart, are expected to pay a similar rate or a slight cut for this year.

Kampanart Lohacharoenvanich, president of Trinity Securities and the Association of Securities Companies, said bonus payments would be close to last year's due to the slight increase in daily turnover in the stock market.

"It's difficult to estimate the bonus payment this year due to a number of variables. In the past, 80 per cent of revenue came from brokerage services and turnover indicated the bonus payment. Now, we have to wait until year-end," he said, adding that Trinity has not yet finalised the figure.

In the first 11 months, daily bourse turnover was Bt17.5 billion, up 7 per cent from Bt16.3 billion last year.

Adisak Kammool, vice president for research for KGI Securities, believes the bonus this year will be four to five months, like last year.

"I don't think the rate will be better than last year," he said. "Many houses spent a lot this year in preparation for liberalisation in the securities sector next year. Though turnover this year is higher than last year, there are many small brokers who have stolen some market share from the big players."

In 2006, according to the Personnel Management Association of Thailand, automotive companies paid the highest payment ratio at 3.4 months. Trailing behind were those in manufacturing, consumer products, chemicals and electronic appliances.

Business Desk

The Nation