JOLLIBEE Foods Corp. will hold its annual stockholders’ meeting on June 26 in the PSE auditorium of the Philippine Stock Exchange Building at Ortigas Center. Due Diligencer, as it did for Pepsi-Cola Products Philippines Inc. three weeks ago, is presenting the following piece to apprise the public about the company and its owners.
Even with this piece, the nagging question remains: Will Jollibee, like other listed companies, also follow a prepared script?
Jollibee’s public stockholders should not simply watch as the chairman and other high-ranking executives recite a litany of financials. Instead, they must participate in the proceeding by raising questions during the open forum.
Largest food chain
Jollibee is, no doubt, the Philippines’ fastest-growing food chain. It may even be one of the most profitable companies, if not the most profitable, that given its accumulated retained earnings, would make each member of the family that controls it a multimillionaire many times over.
As a public company, however, the Jollibee group is like any other family-owned business. Businessman Tony Tan Caktiong, who is the chairman, and his family, control the company’s nine-man board, which includes two independent directors, namely Monico V. Jacob, a former associate commissioner of the Securities and Exchange Commission, and Cesar P. Consing, president of the Bank of the Philippine Islands.
The only non-family member of Jollibee’s board is former Chief Justice Artemio Panganiban, a regular director who owns one JFC share directly and 11,000 shares indirectly “through Deutsche.”
Hyper Dynamic Corp. is the single biggest stockholder of Jollibee. It owns 273.219 million JFC shares, or 25.61 percent. The food chain explained in the ownership filing that “Tony Tan Caktiong and certain relatives within the second degree of consanguinity and affinity” are Hyper’s majority stockholders. It did not identify the “relatives.”
Caktiong and his family also own Honeysea Corp., which holds 127.744 million JFC shares, or 11.97 percent. Winall Holdings Corp., another family-owned company, holds 54.141 million JFC shares, or 5.08 percent.
If you are among the public curious to learn more about the ownership profile of Jollibee, you have to contend with the secrecy behind certain holdings. As with other listed companies, you would have difficulty in deciphering the individual ownership of shares held by PCD Nominee Corp. as a stockholder of record, possibly for insiders.
As a stockholder of record, PCD holds 321.191 million JFC shares, or 30.11 percent, for “non-Filipino” and 79.57 million shares, or 7.46 percent, for “Filipino” holders. The two blocks hold a combined total of 400.761 million shares, or 37.57 percent.
Under “citizenship,” it identified the beneficial owners of PCD-held foreign-owned shares only as “non-Filipino” without specifying the nationality. Are there Americans among them? Nobody knows for sure because the filing does not say so.
Jollibee’s ownership profile could make PCD the food chain’s biggest stockholder, when it is not. Despite the secrecy, PCD disclosed that of the 321.191 million JFC shares it holds, 646,528 shares are “lodged with Deutsche Regis partners Inc.” which are owned by Queenbee Resources Corp., a “special purpose vehicle which is the issuer of warrants over such shares.”
Should there be no question on a family’s control of Jollibee, the public should focus on Jollibee’s financials. What, for instance, does Jollibee intend to do with its huge retained earnings that had reached P23.833 billion as of Dec. 31, 2014? Why allocate P10.2 billion for future expansion when it makes money from franchisees? What is the company’s immediate plan with P9.828 billion in retained earnings that it said is “available for dividend declaration?” Is this disclosure not giving false hopes to the public?
Finally, is the public aware that executives are getting more expensive every year? In the last three years, Jollibee paid its management team a total compensation of P1.461 billion. Of the amount, P327.98 million, or 22.449 percent, went to the top five, or P65.596 million each; and P1.133 billion, or 77.551 percent, to “all other executives and directors unnamed.” Any stockholder who wants to ask if Caktiong and his brothers are not overpaid?