Salary and bonus of Vietnamese tycoons in difficult times, some get billions/month, others get 0 VND

A multi-billion dollar fee is difficult to obtain.

While many businesses are rushing to announce their Q3 2023 earnings results, Kien Giang Construction Investment Consulting Group Joint Stock Company (CKG) has just reported its audited 2023 semi-annual report with a sharp decline in profit. The company's shares were also recently placed under control from October 12th. However, the remuneration for the company's real estate executives remains very high, with some earning nearly 1.4 billion VND per month.

Accordingly, Chairman Tran Tho Thang's remuneration reached over 8.4 billion VND in the first half of 2023, equivalent to more than 1.4 billion VND per month. This income decreased compared to nearly 9.7 billion VND in the same period, but it is 300 times higher than the income of the remaining members.

Kien Giang Construction Investment Consulting Group operates in the real estate sector and has several notable projects such as the Northwest Urban Area, the Nam An Hoa project, and the Vinh Hang Cemetery Park project… According to CKG, the company's profits decreased due to high interest expenses, a sluggish real estate market, and the need to make additional provisions for doubtful receivables…

Meanwhile, according to its Q3 2023 financial report, Mobile World Investment Corporation (MWG) recorded a dramatic drop in profit, down 96% year-on-year to 39 billion VND (compared to a market capitalization of over 55,000 billion VND). Chairman Nguyen Duc Tai, Board member Doan Van Hieu Em, and General Director Tran Huy Thanh Tung did not receive salaries this quarter.

Nevertheless, Robert Willett still earned 1 billion VND in the third quarter. The total income from salaries for MWG's senior executives was 3.6 billion VND, compared to 8.5 billion VND in 2022 and over 10 billion VND on average in previous years.

In the third quarter of 2023, Phat Dat Real Estate (PDR) saw its profits decrease by 86% compared to the same period last year, but Chairman Nguyen Van Dat's salary still reached nearly 500 million VND during the period, even though this amount had decreased by more than 80% compared to the same period.

The real estate market remains challenging. Real estate companies are focusing their efforts on debt restructuring following the bond market crisis. Phat Dat Real Estate recently received approval from the State Securities Commission to issue over 67 million shares in a private placement to raise nearly 672 billion VND to repay the principal and interest on bonds issued in 2021 and 2022 (a total of 7 tranches). In the first nine months of the year, PDR spent a total of over 1,500 billion VND to repurchase numerous bond tranches.

luong0dong vt.jpg — *Many Vietnamese tycoons receive zero compensation. (Photo: VT)*

Despite the challenging year of 2022, many business leaders still recorded monthly incomes in the billions of VND. Ms. Tran Mai Hoa, General Director of Vincom Retail, received nearly 1 billion VND per month. Ms. Mai Kieu Lien ( Vinamilk ) received approximately 540 million VND per month.

In 2021, the seven members of the Board of Directors of Hoa Phat Group (HPG) received nearly 118 billion VND in remuneration, averaging 1.4 billion VND per person per month.

Receive a salary of 0 dong.

Conversely, many business leaders receive zero salary. Some business owners don't even receive executive compensation during the years when their businesses are thriving.

While each member of Hoa Phat's Board of Directors received a monthly remuneration of 1.4 billion VND in 2021, in 2022, the members of HPG's Board of Directors, including Chairman Tran Dinh Long, did not receive any remuneration.

In the fourth quarter of 2022, HPG recorded a record loss of nearly 2,000 billion VND, bringing the full-year profit down to just over 8,400 billion VND, equivalent to 24% of the previous year. 2022 was also the first year that Hoa Phat Group, led by Mr. Tran Dinh Long, failed to meet the after-tax profit target set by the General Shareholders' Meeting.

As mentioned above, due to plummeting profits, the Chairman of Mobile World Group (MWG), Nguyen Duc Tai, also received a salary of 0 VND in the third quarter of 2023. Board member Doan Van Hieu Em and General Director Tran Huy Thanh Tung also did not receive salaries during this quarter.

After assuming the position of Chairman of the Board of Directors of Coteccons (CTD) at the end of 2020, Mr. Bolat Duisenov also pledged to accept a salary of 1 USD until the company's situation improved. Since then, the company has faced many difficulties and its stock has fallen sharply.

In recent years, despite doing quite well financially, many business leaders have not received salaries, such as Mr. Pham Nhat Vuong (Chairman of Vingroup), Mr. Truong Gia Binh (Chairman of FPT), Ms. Nguyen Thi Thanh Phuong (Ban Biet Securities), etc.

For the past decade, Ms. Nguyen Thanh Phuong, Chairwoman of the Board of Directors of Ban Viet Securities, has consistently received zero remuneration. Meanwhile, Chairman Nguyen Dang Quang and the Board of Directors of Masan Group have not received any remuneration since 2013, despite achieving impressive business results.

Not accepting compensation is seen as a gesture of solidarity from management, easing the dire operational situation, but also as a commitment to working for greater goals, although sometimes it is also perceived as a PR opportunity for the company.

In fact, many business leaders have very large sources of income that can far exceed normal salaries and compensation. This is due to the increase in the size and value of the business, with a sharp rise in stock prices.

The assets of the executives, derived from stock holdings, have increased significantly. In addition, there are stock bonuses or preferential stock purchases through ESOP programs. As major shareholders, many executives still receive tens or hundreds of billions of dong in dividends each year.

Many "zero-remuneration" business owners have become USD billionaires, such as Pham Nhat Vuong, Tran Dinh Long, and Nguyen Dang Quang…

Around the world, many entrepreneurs have seen their wealth increase significantly, primarily due to rising stock prices driven by strong business performance, such as Tim Cook (CEO of Apple) and Elon Musk (Tesla).