IT seems Bangko Sentral ng Pilipinas (BSP) finds it more difficult to approve banks’ stock dividends than cash dividend when both are sourced from surplus or retained earnings. If not, how come BSP approved the 50 percent stock dividend of Asia United Bank (AUB) after more than five months but only two month the P0.90 per share dividend of BDO Universal Bank?
Well, BSP deserves the benefit of the doubt. Perhaps, the fault lies somewhere in the case of AUB while there was nothing wrong at all in BDO’s application for BSP’s approval of its cash dividend.
Whatever the reason or reasons for the “delay” in BSP’s go-signal for AUB to distribute a 50 percent stock dividend, what’s more important is that the stockholders’ agonizing wait is finally over.
50% stock dividend
FOR the information of the public, here are some of the details related to AUB’s stock dividend and BDO’s cash dividend.
On May 18, 2015, AUB disclosed the May 15, 2015 approval by its board of a 50 percent stock dividend subject to the approval by at least 2/3 of the outstanding capital stock of the corporation, and by the BSP and the Securities and Exchange Commission.
“The record date and payment date will be set by the Board at a later meeting after the above-stated approvals,” the bank said in the same filing, which would issue 161.77 million as the 50 percent dividend.
AUB’s stockholders ratified said dividend during its annual meeting on June 26, 2015. Meanwhile, in a meeting on Aug. 28, 2015, its board “delegated to the bank’s president, Mr. Abraham T. Co, the authority to set the record date and payment date for the said stock dividend in accordance the rules of the SEC and the Philippine Stock Exchange.”
BECAUSE it is a bank, AUB is under BSP’s regulatory jurisdiction, the reason for the identification of the central bank as “other relevant regulatory agency, if applicable.”
Here is the most important part of AUB’s disclosure on Oct. 16: “On Oct. 15, 2015, AUB received notice of approval by the BSP of the stock dividend.” Thus, the bank set the record date and payment date for the dividend on Oct. 29, 2015 and Nov. 26, 2015, respectively.
That BSP either took more than five months to approve the distribution of AUB’s 50 percent stock dividend or that long period of time for the bank to seek its (BSP’s) imprimatur could have made the public stockholders suffer the agony of such a long wait.
In comparison, BSP approved on June 26, 2015 the P0.90 per common share dividend of BDO Universal Bank only two months after the bank’s board approved it on April 24, 2015.
The question that may be asked is why it took BSP five months to approve AUB’s stock dividend but only two months for BDO’s P0.90 per share dividend.
Why don’t banks whose shares are publicly traded disclose in their filings the date they filed for BSP approval of their dividends either in cash or in stock? In this way, their public stockholders will know who are responsible for the delay in the distribution of such dividends. Just suggesting.
RAMON Jacinto is the president of Philcomsat Holdings Corp. He is one of the company’s five highest paid executives. The others are Katrina Ponce Enrile, chairman and executive vice president; Erlinda I. Bildner, treasurer; Manolita L. Morales, assistant treasurer; and Victoria delos Reyes, corporate secretary.
Philcomsat, which reported a deficit of P106.284 million as of June 30, 2015, said the group’s compensation this year would be limited to salaries of P3.185 million which it paid them in 2014. In 2013, aside from salary, it gave them a bonus of P2.412 million for total compensation of P5.597 million.
In the same posting on the website of the Philippine Stock Exchange, Philcomsat said it increased in 2014 the salary of “all other officers as a group unnamed” to P3.139 million but without the usual bonus that it paid them in previous years. In 2013, the group got a total of P2.72 million consisting of salary of P1.56 million and bonus of P1.16 million.
In 2013, Philcomsat paid the 11 members of its board salary of P3.55 million; allowance of P2.43 million; and bonus of P4.118 million, for a total of P10.098 million. The company could not be as generous as it was two years ago to its directors. In 2014, it reduced by P4.243 million their pay and perks to P5.855 million divided into salary of P3.575 million and allowance of P2.28 million. It said it would pay them the same compensation this year.
“All other officers as a group unnamed will continue to receive this year P3.139 million, which was their compensation in 2014.
Apparently, Philcomsat’s executives are lucky that, despite the deficit, the company could still afford to be generous to them.