JFC’s P3M ‘extra generosity’

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EMETERIO SD. PEREZ

EMETERIO SD. PEREZ

SOMETHING is wrong with the preliminary statement Jollibee Food Corp. posted on the website of the Philippine Stock Exchange. In the filing, the food chain was “overgenerous to “all other officers and directors as a group unnamed” because it gave them an extra bonus of P3 million

It took me a longer time than I usually spend in preparing the data for this Duediligencer piece because of the mistake in the filing. In 2014, JFC reported to have paid “all other” executives the salary of P236,601,829 and bonus of P131,910,177. While two amounts totaled P368,512,006, JFC added them but reported the sum as P371,512,006.

Where did JFC get the extra P3 million for its favored executives?

Looking for the error in a filing, especially when it is a number is challenging. You have to dig into the data until you feel exhausted that you want to give up.


Yet, the challenge won’t easily vanish. You just don’t forget a number, especially when the difference between the right and the wrong is P3 million.

Three million pesos is a lot of money to lose and a lot of Chikenjoy orders for a family.

5 highest-paid execs

What the public would perhaps appreciate is if Jollibee would report the compensation of its executives.

For a change, though drastic, why shouldn’t JFC disclose the annual salary and bonus of each of JFC’s five highest-paid executives led by Tony Tan Caktiong, chairman of the board. As has been its practice and like other listed companies, it simplifies the filing of executive compensation by disclosing only the amount it pays them as a group.

Aside from Caktiong, JFC’s four other highest-paid executives are Ernesto Tanmantiong, president and CEO; Joseph Tanbuntiong, treasurer, president-Jollibee Business unit; Daniel Rafael Ramon Gomez 3rd, chief marketing officer-Jollibee group; and Ysmael V. Baysa, chief financial officer.

Jollibee paid Caktiong and company the salary of P61,005,769 and bonus of P51,901,175 in 2014 for a total of P112,906,944; and the salary of P93,581,843 and bonus of P38,086,879 in 2015. This year, JFC estimated the group’s pay and perks at P174,536,823 equivalent to the salary of P114,590,966 and bonus of P59,945,857.

Pay and perks for all others

The same compensation filing showed JFC paid “all other officers and directors as a group unnamed” the following: the salary of P236,601,829 and bonus of P131,910,177. This was where JFC committed an error. Instead of the sum of P368,512,006, it reported a total of P371,512,006.

Who among JFC’s “all other executives” got the extra bonus —a big one—of P3 million? This is corporate generosity at its best.

Jollibee reported the following pay and perks of “all others” as a group: salary of P393,351,573 and bonus of 156,376,456 in 2015; and (estimate only) salary of P501,241,880 and bonus of 206,592,350 in 2016.

In summing up the 2014-2016 compensation report, JFC said, including its estimate for 2016, it would have paid the five top executives a total of P419,112,489 equivalent to the salary portion of P269,178,578 and bonus of P149,933,911. The company’s “all others unnamed” received the salary of P1,131,195,282 and bonus of P494,878,983 for a total of P1,626,074,265.

Profitability

Jollibee is one of the more profitable listed companies. In a consolidated audited financial statement, it reported a total of P188.005 billion retained earnings of which only P36 billion is classified as “appropriated” and P152.005 billion as “unappropriated.”

The amount of retained earnings represents a company’s accumulated profits and is an entry under “equity.” It also suggests the ability of a company to distribute dividend either in cash or in stock.

While JFC had paid up capital of P8.031 billion, it had additional paid-in capital (APIC) of P76.4 billion.

APIC represents the amount in excess of par value when a company issues or sells new shares to its stockholders.

In a footnote, JFC cited the contribution of the conversion of the parent company’s convertible bonds into 6.715 million common shares in 2015 and 68,378 common shares in 2014. The conversion of bonds into shares resulted in an APIC of P4.833 billion in 2015 and P47.2 million in 2014.

esdperez@gmail.com.

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