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Evergreen Employees Get Another Windfall

Bloomberg
Total Views: 8021
March 20, 2023

By Low De Wei and Cindy Wang (Bloomberg) —

Soon after giving its employees a bumper 50-month bonus, Taiwan’s Evergreen Marine Corp. is handing out another hefty reward as it reaps the gains of a now-fading shipping boom.

The shipping giant’s 3,100 or so employees, received a total NT$1.92 billion ($62.8 million) in the latest payout, taken from the record profit the firm earned in the last financial year, according to annual results announced last week.

Shipping firms have reaped the benefits of an unprecedented industry-wide shipping boom over the past two years, driven by a pandemic-fueled surge in demand for consumer goods and freight rates. Even so, this has reversed in recent months as demand has plummeted amid economic uncertainty and rising geopolitical tensions.

The company distributes 0.5% of its earnings as employee compensations according to its articles of association, Evergreen Marine said. The bonus payments will be distributed according to the individual performance of employees, it added.

In early 2021, a ship the company operated got stuck in the Suez Canal. It received a record net income of NT$334.20 billion last year, but that fell short of analysts’ estimates. 

“We see indications that an increasing number of clients are attempting to renegotiate their long-term contracts with Evergreen, which could drive down the long-term contract freight rates that are key to profitability,” Bloomberg Intelligence analysts Kenneth Loh and Eric Zhu wrote in a Mar. 14 note. 

Bloomberg News reported in January that workers recieved year-end bonuses equal to 50 months salary, or more than four years’ pay, on average.

Employees’ compensations and year-end bonuses are based on the company’s performance for the year and individual performance, according to Evergreen’s annual report. 

Its stock is largely unchanged for the year after plunging by 54% in 2022. The firm’s president Hsieh Huey-chuan said this week that the firm was still confident about operations this year, with the shipping industry expected to see an upturn in the second half, according to local media reports.

© 2023 Bloomberg L.P.

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