INSIDER SQUABBLES? The rumored squabbles, if there are any, within the family who holds majority of the shares of Jollibee Foods Corp. (JFC), have not affected the stock’s performance at all. JFC remains actively traded. From a 52-week low of P150.80, its share price surged 28.18 percent to a year high of P193.30. On Monday, it opened and closed trading at P192.50, after hitting a session high of P192.90 and falling to a low of P192.
This performance is not bad for a stock that has undergone a major corporate reorganization. In a posting on the website of the Philippine Stock Exchange, JFC disclosed the decision of the board on August 6, 2013 appointing Ernesto Tanmantiong as president and chief executive officer, “effective July 1, 2014” while “Mr. Tan Caktiong will
remain as chairman of the Board.”
Tan Caktiong is, of course, Tony, who has, for decades—perhaps dating back to 1978—been JFC’s chairman, president and CEO.
Whether or not his losing the presidency of the company was a result of family infighting we would never know. But based on JFC’s filings, all is well among the Jollibee insiders.
FAMILY-CONTROLLED. As the composition of its board shows, Jollibee Foods Corp. is controlled by the family of businessman Tony Tan Caktiong, who is now listed only as chairman of the nine-man board. The others on the board are his brothers Ernesto Tanmantiong, William Tan Untiong, and Joseph Tanbuntiong; and his brothers-in-law Ang Cho Sit and Antonio Chua Poe Eng.
Three outsiders complete JFC’s board for 2014. These are Retired Chief Justice Artemio Panganiban, Monico Jacob and Cezar Consing.
Jacob is a former associate commissioner of the Securities and Exchange Commission while Consing is president of the Bank of Philippine Islands.
Panganiban is identified on PSE’s website as a regular director, which means he is a nominee of the family, leaving Jacob and Consing as JFC’s independent directors. If this is so, then what about board representation for the public, who are listed as owners of 438.779 million shares, or 41.52 percent of the company? Who represents them on the board?
Like many other listed companies, JFC is public only in public ownership filings but not in board representation.
DIVIDEND. Jollibee Foods Corp. has an existing dividend policy of distributing to its stockholders one-third of its net profits. It has not
only lived up to this but has even exceeded the public’s expectations.
JFC reported net profit of P4.723 billion in 2013; P3.713 billion in 2012; and P3.253 billion in 2011. It distributed cash dividends of P3.36 per share, or a total of P3.526 billion deducted from the unappropriated retained earnings in 2013; P2.20 per share, or a total of P2.294 billion in 2012; and P1.07 per share, or P1.10 billion in 2011.
Based on these financial reports, Jollibee has been very generous to its stockholders. In 2012 and 2011, of its total net profit of P6.966 billion, it paid cash dividends of P3.364 billion, or 48.29 percent of the profit.
This generosity won’t stop JFC from expanding by acquisition. It disclosed this expansion strategy when it increased its appropriation for “expansion” from P7.6 billion to P10.6 billion of retained earnings for the period starting 2013 to 2018. Earlier, the company had earmarked only P2.6 billion, or 50 percent of the P5.2 billion appropriated retained earnings. JFC allocated the other half for capital expenditure.
GETTING INVOLVED. Grace Tan, 65 years old, is the wife of Tony Tan Caktiong, who is 61. She may no longer be active within Jollibee Corp. itself after she retired from JFC’s information technology division, but she keeps herself busy by getting involved in charitable activities.
A company posting in 2012 had this to say about Mrs. Tan Caktiong: “Born in 1949, she is the president of the Jollibee Group Foundation Inc. (JGF) since 2004. She brings to the foundation her extensive experience in business management and leadership in socio-economic activities.”
Unfortunately for the beneficiaries of JFC’s generosity, a company filing showed that the fast-food chain, which is the Philippines’s largest and most profitable, has been tapping outsiders for donations, namely its “shareholders, business partners, executives, employees and the public through JGF coin banks in all JFC stores nationwide.”
In one report, it said its collections had amounted to P44 million.
Why didn’t Jollibee foot the bill for a P44 million charity by taking the amount from its P2.516-billion net profit for the first six months of 2014? Had it done this, it could have shared a mere 1.7 percent of its net profit with the less fortunate of the country’s population.
So that they would not feel bad about losing P44 million to charity, the people at JFC should not equate that amount with how many mushroom hamburgers cum bacon and cheese it could buy in JFC’s 2,833 stores, including 589 outlets in other countries, as of June 30, 2014.