Lopez-owned ABS-CBN listed but not public?

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Emeterio Sd. Perez

Emeterio Sd. Perez

PAYS and Perks. JG Summit Holdings Inc. (JGS) paid its five executives P79.080 million in 2013 and projected the group’s pays and perks to increase by 2.190 percent to P80.812 million this year.

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JGS said John Gokongwei Jr., chairman emeritus, who is the founder of the family’s holding company, is one of JGS’s five most highly compensated executives. The others are James Go, brother of Gokongwei, who is chairman and chief executive officer; Lance Gokongwei, son of Gokongwei, president and chief operating officer; and Patrick Henry Go, a nephew of Gokongwei, member of the board.

Gabriel Singson, former governor of the Bangko Sentral ng Pilipinas, is JGS’s only highest-paid executive who is not a member of the Gokongwei family.

Discrepancy. In 2012, JG Summit said in its latest filing posted on the website of the Philippine Stock Exchange that it paid the top five a total of P70.469 million and “all other officers and directors as a group unnamed” P140.781 million.

But in its 2013 annual report, JGS listed at P73.180 million the total compensation of the top five and P131.142 million of “all other officers and directors as a group.”

In its compensation filing, JGS said compensation of Gokongwei and company in 2012 consisted of salary, P71.225 million; bonus, P1.50 million; and others, P455,000. The “other officers” received in the same year salary of P125.787 million; bonus, P4.20 million; and others, P1.155 million.

Ownership profile. As of March 31, 2014, ABS-CBN Corp. reported in a regulatory filing that 91.14 percent of its outstanding common shares are controlled by the Lopezes through their family-owned companies. Lopez Inc. holds 480.934 million common shares, or 55.14 percent and ABS-CBN Holdings Corp., 313.966 million shares, or 36.00 percent.

ABS-CBN also issued preferred shares, of which 987.130 million, or 98.71 percent, are held by Lopez Inc. but which are equivalent to 52.73 percent of “total outstanding.”

The Lopez-controlled broadcast group also said the 480.934 million common shares represent 55.14 percent of outstanding common shares but only 25.69 percent of total outstanding capital stock of 1.872 billion shares divided into 872.124 million common and one billion preferred shares.

Not public? The ownership profile ABS-CBN Corp. posted on the PSE website shows only 8.86 percent of the company’s common shares are held by the public and 1.29 percent of preferred shares.

This makes ABS-CBN listed but not public per the definition of the Philippine Stock Exchange and the Securities and Exchange Commission.

Under the rule, the public should own at least 10 percent of a listed company’s outstanding capital stock. Computation based on its own filing shows ABS-CBN has a total outstanding capital of 1.872 billion shares.

The Lopezes own 1.782 billion of which 987.130 million are preferred shares. To get the percentage, divide 1.782 billion by 1.872 billion equals 95.192 percent. The rule says the public should own at least 10 percent of outstanding capital.

Finally, public? ABS-CBN Corp. showed how it can be controlled by the Lopez family and at the same time be a public company as required under the 10-percent minimum public ownership rule.

In its public ownership report, ABS-CBN said it has issued based 872.124 million common shares, of which 14.908 million are treasury shares. The deduction left it with 857.215 million outstanding common shares.

Of the outstanding, Lopez Inc. and ABS-CBN Holdings Corp. hold 480.934 million shares, or 57.24 percent (computed on 857.215 equals 56.104 percent), and 324.811 million shares, or 33.97 percent (computed on 857.215 million equals 37.891 percent), respectively.

If the two corporate stockholders own a total of 805.744 million shares, or 91.21 percent (93.995 percent computed on 857.215 million outstanding) how did ABS-CBN arrive at 389.003 million shares, or 45 percent, being owned by the public? Dividing 389.003 million by 857.215 million equals 45.380 percent.

esdperez@gmail.com

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