JG Summit and PLDT’s other stockholders



THE Indonesian-owned Philippine Long Distance Telephone Co. (PLDT) is perhaps the most generous employer when it comes to board compensation. Its generosity is reflected in the company’s filing, in which it disclosed the increase in director’s fees to P250,000 per board meeting attendance and to P125,000 per board committee attendance. A member of PLDT’s 13-man board used to get P200,000 per board meeting and P75,000 per committee meeting.

In the same filing, PLDT summed up the board’s and committee’s compensation as follows: P45 million in 2014; P32 million in 2013; and P35 million in 2012. As part of its compensation package, the PLDT group paid its key officers P1.26 billion in 2014; P1.27 billion in 2013; and P1.29 billion in 2012.

Incidentally, Manuel V. Pangilinan, PLDT chairman, is not among the company’s highest paid executives.

Executive compensation
If First Pacific-owned PLDT has been generous to “key personnel,” it has proven to be more generous to its top four executives. The telecom group, the Philippines’ biggest, listed the “CEO and four most highly compensated officers” but excluded Napoleon Nazareno, who is president and chief executive officer, from among the recipients of PLDT’s executive compensation.

In a footnote to the compensation filing, PLDT said Nazareno draws his remuneration from Smart Communications Inc. It did not disclose the amounts pertaining to his salary, bonus and other pay and perks.

With Nazareno out of the top five list, PLDT paid in 2013 each of the four executives P33.25 million for a total of P133 million, of which P60 million was basic salary, P59 million was other compensation, and P14 million was bonus. The bonus, which averaged P3.5 million, went to the following: Ernesto R. Alberto and Isaias P. Fermin, executive vice presidents; and Anabelle L. Chua and Ma. Lourdes C. Rausa-Chan, senior vice presidents.

In 2014, PLDT was even more generous to the two EVPs and two SVPs by paying them a total of P152 million, or an average of P38 million each, consisting of salary, P73 million; bonus, P15 million and other pay and perks, P64 million.

PLDT stockholder
JG Summit Holdings Inc. is the listed holding company of the group owned by businessman John Gokongwei Jr. and his family. It directly owns 17.2 million shares, or 7.96 percent, in Philippine Long Distance Telephone Co.

At PLDT’s closing price of P2,022 per share on Dec. 21, JGS-owned shares had a market value of P34.8 billion. A return of 7.5 percent is not bad for a significant investment that entitles a stockholder to a seat on PLDT’s 13-man board, which includes three independent directors who are the luckiest of them all for owning only nominal shares.

As founder of the JGS group, businessman John L. Gokongwei Jr. never retires. He was chairman of the board until his retirement in 2001 but at 88 remains a director. He is also chairman emeritus of JG Summit, a title that was created for him in January 2002 when he retired in December 2001. His brother, James, is chairman and chief executive officer, while his son, Lance, is president and chief operating officer. Two other members of the family completes the list of the company’s five highest-paid executives in 2014. Patrick Henry C. Go, his nephew, and Robina, his daughter, are both directors.

Executive compensation
Here is a rare compensation package which includes the bonus of the highest-paid executives that has remained constant — that is, P2.1 million — over the years.

JG Summit paid Mr. Gokongwei and four others a total of P113.77 million, of which P111.3 million was salary; P2.1 million, bonus; and P370,000, other pay and perks. In an earlier filing, it estimated the five Gokongweis’ compensation to amount to P80.8 million divided into salary of P78.2 million; bonus of P2.1 million; and other pay and perks, P475,000.

In 2013 — this was when former Central Bank Gov. Gabriel C. Singson was still a member of the board and was replaced by Robina Gokongwei in 2014 — JG Summit paid its five executives P79.08 million, up from P70.4 million in 2012. Of last year’s compensation, P76.57 million went to salary; P2.1 million to bonus; and P410,000 was classified as other compensation.

Lucky stockholders
Of JG Summit’s five family members, James Go is listed as a stockholder of Philippine Long Distance Telephone Co. As of latest posting, he owns 134,914 PLDT shares with a market value of P272.8 million, computed at P2,022 per share.

Go is also lucky with his PLDT holdings. This year alone, he received in three tranches a total of P20.5 million.

As a stockholder, JG Summit got more. Its 17.2 million PLDT shares entitled it to total dividends of P2.6 billion this year.

First Pacific Co., which is owned by the Salims of Indonesia, is the luckiest of them all. Its holdings thru affiliates and subsidiaries totaled 55.24 million common shares. At P2,022 per share, its holdings, which had total market value of P111.7 billion, entitled it to P8.4 billion in dividends.

The Japanese-owned NTT Communications Corp. and NTT DOCOMO Inc., which own a total of 43.96 million PLDT shares with a market value of P88.9 billion, got total dividends of P6.68 billion.

All these numbers prove that Mr. Gokongwei made the right choice in merging his group’s Digital Telecommunications (Philippines) Inc. with the Salims’ PLDT. He was proven right too in trusting Mr. Pangilinan’s stewardship of the country’s biggest telecommunications group.



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