Corporate History
1. When was MediaTek established?
2. When was MediaTek listed on the Taiwan Stock Exchange?
Financial Facts
1. When does MediaTek's fiscal year end?
2. Where can one find historical financial information on
the web site?
3. How many shares does MediaTek have outstanding?
4. When does MediaTek release monthly earnings?
Stock Information
1. What is MediaTek's stock code?
2. Who is MediaTek's transfer agent?
3. How can one find quote information?
4. What is MediaTek's dividend history?
5. How does one calculate ex-dividend share price?
Employee Profit Sharing
1. What isthe company's policy on employee profit sharing?
2. What is the impact of employee profit sharing to MediaTek's
shareholders?
3. How does employee profit sharing work in Taiwan?
4. What is the difference between
employee stock options and employee bonus shares?
Corporate History
Q1: When was MediaTek established?
 MediaTek was incorporated on May 28, 1997 in the Science-Based Industrial Park, Hsin-Chu, Taiwan, R.O.C.
Q2: When was MediaTek listed on the Taiwan Stock Exchange?
MediaTek was listed on the Taiwan Stock Exchange (TSE) on July 23, 2001 under the ticker 2454.
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Financial Facts
Q1: When does MediaTek's fiscal year end?
It ends on December 31st.
Q2: Where can I find historical financial information on the web site?
This information can be found in the financial information section.
Q3: How many shares does MediaTek have outstanding?
As of Aug. 28, 2008, MediaTek had a total of 1,073,152,299 outstanding shares.
Q4: When does MediaTek's release monthly earnings?
Based on Taiwan Stock Exchange regulation, MediaTek is required to announce monthly revenue by 10th of the following month.
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Stock Information
Q1: What is MediaTek's stock code?
2454 is the stock ticker.
Q2: Who is MediaTek's Transfer Agent?
MediaTek's transfer agent is Chinatrust Commercial Bank - Transfer Agency.
Address: 6F, #83, Sec. 1, Chongcing S. Rd., Jhongjheng District, Taipei City 100, Taiwan (R.O.C.)
Tel: +886-2-2361-3033
24-hour Inquiry Line: +886-2-2311-1833
E-mail: transfer.agency@email.chinatrust.com.tw
Q3: How can one find quote infomation?
Please refer to Market information system.
Q4: What is MediaTek's dividend history?
We distribute retained earnings, if any, either in the form of cash or stock dividends. There is no specific formula by which the amount of distribution is determined. The timing and amount of future distributions will depend on our future earnings and financial conditions.
Unit: NTD / Year |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
Cash Dividend per Share |
1 |
4 |
8 |
8.5 |
10 |
11 |
15 |
19 |
Stock Dividend per Share |
4 |
4 |
3.5 |
1.8 |
1 |
1 |
0.5 |
0.1 |
Ex-dividend Date |
Aug. 29 |
Aug. 29 |
Aug. 18 |
Jul. 29 |
Aug. 10 |
Aug. 2 |
Jul. 25 |
Jul. 16 |
Q5: How does one calculate ex-dividend share price?
Current Formula:
((Closing share price of the previous day - Cash dividend per share) + (Par value per share * Employee stock bonus ratio) + (Subscription price per share * Subscription ratio) / (1 + Stock dividend distribution ratio + Employee stock bonus ratio + Subscription ratio)
In order to expense employee bonus shares from 2008 , the formula will be amended as follows :
New Formula: (Applied from 2009)
((Closing share price of the previous day - Cash dividend per share) + (Subscription price per share * Subscription ratio) / (1 + Stock dividend distribution ratio + Subscription ratio)
Notes :
Stock dividend distribution ratio = Stock dividend (shares ) / Total outstanding shares
Employee stock bonus ratio = Employee stock bonus shares / Total outstanding shares
Subscription ratio = New shares subscribed / Total outstanding shares
Example:
For example, MediaTek's referenced opening share price for Jul. 16, 2008, the ex-dividend day, is calculated as below:
1. Closing share price
on Jul. 15, 2008 is NT$ 288.00.
2. Cash dividend per share is NT$ 19.
3. Stock dividend distribution ratio is 1%, based on 10,408,537 shares divided by total 1,040,853,762 outstanding shares.
4. Employee stock bonus ratio is 21,890,000 bonus shares divided by total 1,040,853,762 outstanding shares, that is 2.103%.
5. Subscription ratio¡GN/A
6. Ex-dividend share price is (288 - 19 + 10 * 0.02103) / (1 + 0.01 + 0.02103) = 261.10. The market picks the nearest price tick, 261.10, as the referenced ex-dividend price.
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Employee Profit Sharing
Q1: What is MediaTek's policy on employee profit sharing?
MediaTek offers all its employees the opportunity to share in the financial success of the company by becoming shareholders. According to Company's Articles of Incorporation, the employee's profit sharing shall not be less than 1% of the total of shareholders' dividend and employees' profit sharing. Employee's profit sharing may be allocated in either cash or stocks.
Q2: What is the impact of employee profit sharing
on MediaTek's shareholders?
Given that employee profit sharing is a non-cash item, the Company's free cash flow is not impacted by the employee profit sharing. As such, dilution of per-share value of a firm offers a better appreciation of the true impact on investors by employee profit sharing distributions. The influence to shareholders is as below:
(unit : million) |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
Original Shares |
216.9 |
316.1 |
460.5 |
641.5 |
769.3 |
864.0 |
968.3 |
1040.9 |
Dividend |
86.8 |
126.4 |
161.2 |
115.5 |
76.9 |
86.4 |
48.4 |
10.4 |
Employee Bonus Shares |
12.4 |
18.1 |
19.9 |
15.7 |
17.8 |
17.9 |
20.7 |
21.9 |
Decrease in treasury stock |
- |
- |
- |
3.4 |
- |
- |
- |
- |
Total Outstanding Shares |
316.1 |
460.5 |
641.5 |
769.3 |
864.0 |
968.3 |
1037.4 |
1073.2 |
Shares Dilution by Dividend |
27.5% |
27.5% |
25.1% |
15.0% |
8.9% |
8.9% |
4.7% |
1.0% |
Shares Dilution by Employee Bonus |
3.9% |
3.9% |
3.1% |
2.0% |
2.1% |
1.8% |
2.0% |
2.0% |
Note: Dividend and employee bonus shares are allocated based on earnings from the previous year.
Q3: How does employee profit sharing work in Taiwan
?
Employee profit sharing is distributed only when the company is profitable. Taiwan Corporate
Law states that the allocation of bonuses to employees is considered a part of the corporate earnings distribution. Hence, it is an item to be deducted
from retained earnings and not an expense item.
Distributable Earnings mainly derives from after-tax net income deducted
by 10% ( legal reserve) plus previous retained earnings. Based on the
outcome, the Board determines how the year's shareholder dividend and
employee profit sharing will be appropriated either in form of stocks or cash.
In Taiwan, the stock dividend or the number of shares issued is dependent
on par value, or NT$10 per share. Among the aggregated distributed income,
the weight of employee profit sharing is specified in the individual Articles of Incorporation at a minimum of 1%.
MediaTek's distributed income in 2007:
From the derived Total Distributable Earnings of NT$59,611,904,280,
MediaTek decided to appropriate a dividend of NT$19,100 for every 1,000
shares (currently 1040.85 million shares are outstanding), ie. NT$19,880,306,854, of which 0.5% was in stock (NT$ 104,085,370
representing 10,408,537 shares) and 99.5% was in cash (NT$19,776,221,484).
According to MediaTek's Articles of Incorporation, The
employee¡¦s profit sharing shall not
be less than 1% of the total of
shareholders¡¦ dividend and
employees¡¦ profit sharing.Employee¡¦s profit sharing may be
allocated in either cash or stocks. Accordingly, dividends and employee profit sharing account for 85.3% and 14.7% of distributed income, respectively.
The above-mentioned dividend derivation, 10,408,537 shares and NT$19,776,221,484 cash for shareholders, attributed to 85.3% of distributed income, totaling NT$19,880,306,854 Employee
received the other 14.7% of distributed income in the form of 21,890,000
shares and NT$3,200,000,000 cash, totaling NT$3,418,900,000.
Total shareholder and employee profit sharing distributed in 2007 were
32,298,537 shares (which is capitalized at NT$10 par value) and NT$ 22,976,221,484 in cash; or NT$23,299,206,854 subtracted from Total Distributable
Earnings.
(NT$)
Net Profit of 2007 |
$33,592,701,905 |
Less: 10% Legal Reserve |
3,359,270,191 |
Less: 10% Special Reserve |
0 |
2007 Distributable Earnings |
30,233,431,714 |
Add: Retained Earnings |
29,378,472,566 |
Total Distributable Earnings |
59,611,904,280 |
2007 Distributed Items |
|
Compensation to Directors and Supervisors |
75,583,579 |
Dividend to Common Shareholders |
19,880,306,854 |
Employee Profit Ssharing |
3,418,900,000 |
Total Distributed Income |
23,374,790,433 |
Total Retained Earnings |
$36,237,113,847 |
|
2007 Distributed Income(NTD) |
Stock (at par value) |
Cash |
Total |
Dividends |
104,085,370 |
19,776,221,484 |
19,880,306,854 |
Employee Profit Sharing |
218,900,000 |
3,200,000,000 |
3,418,900,000 |
Total |
322,985,370 |
22,976,221,484 |
23,299,206,854 |
|
Q4: What is
the difference between employee stock option and employee profit sharing?
Please see
table.
| |
Employee Stock Options |
Employee Profit Sharing |
| Definition |
An employee who receives
a stock option is eligible to purchase a certain amount of company's
shares at a set price - the strike price, during a specified time
period. |
Company allocates annual
distributable earnings in shares to employees. Bonus shares are normally
granted ex-dividend, so that share price upon grant date is already
adjusted by shareholder's dividend. |
| Valuation |
1. Fair value method -
represents what the market would pay for the option and is subject
to the applied models as well as measurement time frame.
2. Intrinsic value method - the difference between the option strike
price and stock price on the grant date, ignoring the time value.
Out-of-money options become worthless after the stock market slide
beyond strike price. |
Share price could be implied
as the cost of expense. However, fluctuation of stock market makes
it difficult to measure the cost. Normally company's management determines
bonus shares in April for the Board's approval in May and appropriates
the shares not till August to October. The value of bonus shares may
vary given unpredictable market volatility upon different measurement
date over this timeline. |
| GAAP |
1. Exercising a stock option increases the shares
outstanding.
2. Companies have the option not to recognize expense when the grant
price is greater than or equal to the market price of the stock at
the time of the issue (under APB25).
3. The difference between value of a share option and the grant price
is recognized as expense over the vesting period. Companies are required
to disclose pro forma earnings which reflect options expense in 10K
footnote annually (under SFAS123). Companies recognising intrinsic
value must present pro forma disclose of net income and EPS as if
a fair value approach had been used.
4. When employees exercise options, company can get a tax benefit
for the difference between strike price and market price. |
1. A reclassification from retained
earnings to capital and do not affect profitability. It is on balance
sheet and expensed through fully diluted share count.
2. Allocation of profit sharing to employees is considered part of corporate
earnings distribution. Among the aggregate distributed earnings, the
weight of bonus shares is specified in the individual Corporate Charter
at a minimum of 1%.
3. The distribution information should be disclosed on footnote of
financial statements.
4. Profit Sharing is not an allowable corporate tax deduction. |
| Corporate Practice |
1. No fixed distribution
percentage or schedule, company may cancel existing options to issue
new options at a lower strike price as the stock prices plummeted.
2. Company can issue options with discretionary strike price or expiry
cycle.
3. Company may issue options in broad-based employee participation
or only to top executives. |
1. Profit sharing is distributed
only when the company is profitable.
2. Employee bonus shares can be sold immediately upon issue and are
taxed at par value a share. Nevertheless, some companies may require
lock-up period on the bonus shares. | |
