A Big Heart Gets Bigger

The founders of Kingston Technology Corp. of Fountain Valley have raised the bar for bosses again. First they showered their employees with bonuses; now they are buying back the company out of concern that another employer might not treat the workers as well.

Nearly three years ago David Sun and John Tu sold 80% of their company to the Japanese firm Softbank for $1.5 billion. In January 1997 they distributed $38 million from their profits as bonuses to their employees. Last year they dispensed an additional $20 million; this month, another $20 million. The number of employees worldwide has risen to 1,200, and the bonus fund still has tens of millions of dollars.

Now Sun and Tu are buying the company back from Softbank for $450 million. The Japanese company, which has many other holdings, has decided Kingston doesn’t fit with its new business strategy. But Sun and Tu believe Kingston can weather tough times in the computer technology industry. The company supplies memory products to makers of personal computers.

The founders deserve credit for looking out for their employees. Tu said the duo is buying back the firm because “it’s our responsibility to our employees to make sure someone else doesn’t come in here to take control.” Keeping the company in Orange County is a boon for the workers, the firms that serve the company and its employees, and the agencies that collect taxes on Kingston’s property and profits.

Kingston is but one of many computer-related companies in Orange County that have come to the forefront in the 1990s, replacing defense contractors and other firms in “old style” industries. The transformation to high tech has scattered new millionaires across the landscape.

Sharing the wealth with its workers has paid off for Kingston, benefiting everyone from the owners to the employees on the shop floor. Can anyone be surprised that applicants keep sending resumes?