Employees Reap Gains in Sale of EMachines

Employees of low-cost computer maker EMachines Inc. shared a $72.5-million windfall when the company was sold last month to rival Gateway Inc.

Founder John Hui distributed more than half of the profit from the $290-million cash and stock sale to the Irvine company’s 138 employees.

Managers, warehouse workers and other employees received checks equal to at least 30% of their annual salaries. Some executives got bonuses of nearly $100,000. About two dozen executives split 12.5 million shares of stock.

“I bumped into a lot of happy people when I handed out the checks,” said Adam Andersen, former EMachines chief operating officer and now chief administrative officer at Gateway.

“Typically, an owner would keep everything,” said Wayne Inouye, who was chief executive at EMachines and is now CEO of Poway, Calif.-based Gateway. “But John felt very strongly that every employee should be rewarded and share in the transaction.”

Hui, who kept about $57 million in profit, said rewarding workers was smart business.

“I’m not a generous guy. I end up with the most,” he said. “It’s just a formula that works. I take care of my employees.”

Two of Hui’s friends, David Sun and John Tu, handed out nearly $100 million worth of bonuses to employees of Kingston Technology Co. of Fountain Valley when they sold the computer memory chip company in 1996 for $1.5 billion.

Gateway shares slipped 3 cents Thursday to $6.01 on the New York Stock Exchange.