Lucio Tan and MVP are Victorias’ saviors

Emeterio Sd. Perez

Emeterio Sd. Perez

WHY are companies that are supposed to be public, being listed on the Philippine Stock Exchange, very secretive about the individual compensation of their top executives?

Is it because the Securities and Exchange Commission allows them to simply state the total amounts for the top five and for “all other officers and directors as a group unnamed”?

Yes, this secrecy goes on probably because the SEC does not have the rules to compel full disclosure of the individual pays and perks of at least the top five officers of listed companies. Even then, would it be embarrassing for listed companies to tell the public how much they pay their top executives?

Anyway, whatever the reason or reasons why these so-called public companies choose to disclose only the total compensation for the group, the public investors who trade on listed shares may not care at all as long as the companies they trust are generous in declaring dividends either in cash on in stock.

Detailed compensation.

Yes, most companies choose to hide the real numbers when posting their compensation filings. But there is one that recently started disclosing the amounts received by three of its executives who were not covered by the appropriate compensation disclosure.

The posting made by Victorias Milling Co. was posted way back in January this year, but its disclosure on how much it pays Wilson T. Young, chairman of the board; Terence Son Keng Po, treasurer; and Brian Keith F. Hosaka, corporate secretary, is still worth telling.

As it has told the SEC and PSE, “the chairman of the board and the treasurer “shall be entitled” to P200,000 fee a month each and the corporate secretary to P100,000 a month.

Group compensation.

Apparently, Victorias Milling Co. made the separate disclosure on the three executives because they are not among the five highest paid executives, namely Hubert D. Tubio, president and chief operating officer; Anna Rosario Paner, managing director; Arcadio S. Lozada Jr., vice president for manufacturing; Jerry T. Opinion, chief finance officer; and Teresita V. Ilagan, controller. As a group, they received salaries of P16.458 million in 2012 and P22.387 million in 2013. This year, the company estimated their pay at P22.40 million.

In addition, VMC paid Tubio and company “bonuses and other compensation” of P2.627 million in 2012 and P9.408 million in 2013. It estimated their pays and perks this year at P9.40 million.
LT and MVP to the rescue.

Victorias Milling Co. is finally able to pay more its executives as it has finally recovered from years of losses. As of May 31, 2014, it has already piled up retained earnings of P750.238 million as a result of continuing profitability.

In a financial filing, VMC said its consolidated net profits in the nine-month period ended May 31, 2014 surged 43.487 percent to P947.743 from P617.475 million in the same period last year. These profits resulted from consolidated revenue, which increased 47.167 percent to P4.259 billion from P2.894 billion.

VMC’s financials were worse in previous years, when its deficit amounted to P968.336 million as of Aug. 31, 2012; P1.580 billion as of 2011; and P2.031 billion as of 2010.

These numbers should frighten every investor who had waited for years for VMC’s recovery and remained holding what could be worthless stocks. Then, the saviors finally arrived.

First to come to VMC’s rescue was businessman Lucio Tan. Then came Manuel V. Pangilinan, who tapped Metro Pacific Holdings Inc. as the corporate vehicle of the Indonesian-owned First Pacific Co. in buying VMC shares. In one trade, MPHI bought 35 million shares at P4.75 each.

Based on the latest report, MPHI directly owns 177.213 million VMC shares, which represent 7.485 percent of outstanding shares.


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1 Comment

  1. Most investors who trade on listed shares do not care about executive compensation provided that the listed companies remain generous in declaring cash dividends. But purpose driven investors should care about executive compensation to know whether the listed companies are overcompensating unproductive executives selected for the position based on relationship rather than qualification.