ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, April 19, 1997 TAG: 9704210038
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: FOUNTAIN VALLEY, CALIF.
SOURCE: GREG MILLER LOS ANGELES TIMES
What did they do with all the money? Some bought cars and houses, many paid off debts, and others gave to charities and their families.
Just a few mornings after Kingston Technology Corp. gave employees $38 million in bonuses, the first Porsche rolled into the parking lot.
It was a black Turbo Carrera, a sleek speedster that other employees greeted with ``wide-eyed glares,'' said its driver, Keith Kline, a 33-year-old sales manager.
It was also a joke.
``I borrowed it from a friend,'' Kline recalls with a laugh. ``Three days later I was back driving my 11-year-old Ford Thunderbird.''
With payouts from its unprecedented bonus program surpassing $300,000 in some cases, the Fountain Valley company's 523 employees became the envy of the working world.
Three months later, though, the ethos at Kingston is still more sedan than sports car.
Not that some employees didn't act on their dreams ... or face temptations. In the days after the announcement last December, employees were divebombed by financial vultures.
BMW salesmen passed out business cards in the company lobby, and telemarketers pestered workers by phone, urging them to buy everything from mutual funds to desert property ``just a short 45-minute commute from Las Vegas.''
``They tried to ask me to invest in stock, to buy life insurance, accident insurance, and some called me to offer early-bird discounts on a car,'' said Minh Nguyen, who heads the shipping department.
The high-tech industry is full of stories about Ferraris and Silicon Valley mansions purchased by engineers who got rich on stock. But Kingston isn't an ordinary high-tech company.
In an industry of flash and quick fortunes, the business was built by two Taiwanese immigrants - John Tu and David Sun - who treat workers like family, and who preach humility and responsibility. For the most part, employees such as Nguen and Kline made sure those values prevailed.
``Everybody has been pretty conservative,'' said Kline, who used his money to buy a house. ``It speaks of the values that have been instilled by John and David.''
That is not to say nothing has changed since the bonus checks - ranging from $2,000 for recent hires to well into six digits for veterans - were passed out Jan.6. It's just that much of the fallout was unexpected.
Sun and Tu, for instance, have been lauded for striking a blow against corporate greed, but they also have been stung by rebukes from executives at other companies who saw Kingston's bonuses as an unwelcome threat to the employee compensation status quo.
For the company's workers, the event seemed easy enough to interpret. Employees, many of them immigrants who came with little more than hope, would be able to enjoy big bites of the American dream. In fact, some have bought cars and houses, many paid off debts, and others gave to charities and their families.
But reality is not so tidy. And if the money brought a great deal of joy, it also brought complications.
Jeannine Moynahan, for instance, used part of her bonus to hire a private investigator to help her 18-year-old daughter locate her father, who abandoned the family before she was born.
``Since she was tiny, she had always talked about how she had a hole in her heart,'' said Moynahan, 37, a saleswoman.
Moynahan is now remarried, and her household has four children. The bonuses helped the family pay off lingering debts, plus get Moynahan her dream car: a 1987 Mercedes 190 her husband purchased at an auction for $4,000.
But even though the family is thankful for the money, Moynahan frets that it has also exposed deep emotional wounds.
Her daughter's father was located in Washington state and was sent two letters from her, one of them delivered and verified by United Parcel Service. But months later, he still hasn't responded. ``I didn't want her to be hurt again,'' Moynahan said. ``But she was willing to take the risk.''
Since they founded the company in 1988, Sun and Tu have had an unorthodox but effective approach to business. They never borrowed a dime, refused to sell stock in their company, did deals on handshakes, and to this day reject offices in favor of ordinary cubicles in the center of the company's sales floor.
Responding to values taught by their parents, and to their disaffection with the way they were treated as employees, they have forged unusual bonds with their workers. They promise jobs for as long as the company lasts, and share profits with employees every quarter.
In return, employees are tireless, devoted and extremely loyal. Turnover is less than 1percent a year.
When Sun and Tu sold 80percent of Kingston, which makes computer memory products, to Softbank Corp. of Japan last year for $1.5billion, they insisted they be able to continue to run the company the way they always have. They also set aside $100million for workers. Of that amount, $38million was paid out in January, and the rest has been set aside for bonuses in the coming years.
Sun and Tu cautioned employees to use the money wisely, urging them to pay off their debts and set aside money for their children and their future. And that is what many workers did.
Ron Seide, a general manager at the company, set up separate $20,000 accounts for his sons, and put the rest of his six-figure bonus into investments including mutual funds. His only extravagance was a $500 pair of eyeglasses.
``Color me dull and responsible,'' he said.
A few employees were more adventurous.
Darin Ferriola, a product manager, took a leave of absence to make a movie about Generation X workers in a high-tech company.
Brandi LaPlante, a sales manager for nearly six years, was the only employee to leave. LaPlante, who joined a budding computer networking company in Irvine, said the new job offered better chances for advancement, but that it was a difficult decision.
The bonuses also brought some things money is not supposed to buy.
Michael Bray, a sales analyst, said he had suffered from high blood pressure for years. He had been out of work before joining Kingston four years ago, and still had lingering debts. He had a teen-age daughter entering college, plus a 2-year-old at home.
``My blood pressure was 160 over 130, and anything above 90 is serious,'' said Bray, 49. ``My doctor said I had to bring it down or I was going to have a heart attack.''
But the condition disappeared almost as quickly as he deposited his check. Bray set up college funds for his children, paid off debts, and set aside money for a down payment on a house. His pressure plummeted to 110 over 80.
``My doctor asked me what was going on in my life and I told him I worked at Kingston,'' Bray said. ``He asked if he could get a part-time job there.''
Kingston answers that question these days with a sign taped to the company's doors.
``Kingston is not currently accepting any unsolicited job applications or resumes,'' the sign reads. ``Thank you for your interest.''
Sun and Tu both say they have been overwhelmed by the thousands of supportive letters and calls they have received from across the country. Because of that reaction, ``I am more than ever convinced that what we do is right,'' Tu said.
But Kingston executives also have been stung by hostile responses from their counterparts at other companies, including their own suppliers and customers.
``If you have that much for your employees, why don't you lower your prices to give me more?'' the chief executive of one customer said to Sun.
``That is my employees' money,'' Sun shot back. ``I have to do what I think is right.''
Of course, Sun and Tu profited handsomely themselves from the sale of their company, sharing $1.4 billion in cash and stock. Both are on Forbes magazine's list of the country's 400 wealthiest people.
But they have signaled that they do not plan to hoard their fortunes, and even hint that they are not finished giving to employees, even after the $100 million runs out.
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