ABS-CBN Corp. and Jollibee Foods Corp. have “some things” in common. Both are public companies because their shares are listed on the Philippine Stock Exchange. Resourceful followers of these two listed companies would also know that they share Kris Aquino as a common endorser of their brands.
A posting on the website of the Philippine Stock Exchange listed Aquino, the sister of the chief temporary occupant of Malacañang, as owner of 50,000 ABS-CBN common shares, an ownership that lands her among the broadcast group’s top 100 stockholders.
The same filing showed the Social Security System (SSS) and the Government Service Insurance System (JFC) among the JFC stockholders. Should their members attribute the choice of stocks of the two funds’ top executives to the taste of the food chain’s hamburgers and their belief in the endorser of Chowking, one of the members of the JFC food chain?
What a coincidence! Has Aquino, as JFC endorser, influenced SSS and GSIS in their choice of listed stocks? As of Dec 31, 2014, SSS and GSIS owned 353,270 JFC shares and 5.347 million JFC shares, respectively.
Hidden talent fees
The financial posting of ABS-CBN and Jollibee group had nothing to show regarding the amount or amounts they pay Aquino for her endorsement. As a matter of fact, if the public stockholders were to view JFC’s financials, they would have no basis but to guess the amount of her talent fees for posing at the door of every branch of Chowking to welcome every potential diner.
Again, if JFC’s public stockholders were to ask if Aquino was effective as an endorser, only Chowking would have the answer. Otherwise, any of the small stockholders of Jollibee would have to observe for himself if Chowking had developed a huge market because of Aquino or despite her.
As far as Chairman Tony Tan Caktiong is concerned, the public should not expect him to make Jollibee group transparent in detailing its marketing and advertising expenses.
The individual investors, even if they own only few JFC shares, are entitled to know how much the company pays Aquino for her life-sized poster that adorns every Chowking branch. They should be told that the majority stockholders of Jollibee who rule the board are not ready yet to satisfy their curiosity over Aquino’s fees.
1% cash dividend
Of course, the public can only admire JFC’s transparency in disclosing the cash dividends it pays its stockholders, such as the P1.64 per share in 2014. This translates to 1 percent a year despite the food chain’s 14.27 percent rise in net profit to P5.397 billion in 2014 from P4.723 billion in 2013.
As of Dec 31, 2014, Jollibee had accumulated retained earnings of P22.55 billion, of which P10.20 billion was allocated to future expansion.
Jollibee’s dividend generosity, which is based on available retained earnings, translates to a return of 1 percent a year, which should give the company’s insiders P963.389 million for their ownership of 591.091 million JFC shares.
Like Jollibee, ABS-CBN, which is owned by the Lopezes, is also secretive about Aquino’s compensation as the broadcast’s alleged star revenue generator. Instead, it prefers to be more transparent in disclosing its losses in Star Cinema, which has Aquino as its main star attraction.
A footnote to a financial filing had this to say on Star Cinema as part of an entry under “investments in associates”: “ . . . Investment in another associate, Star Cinema Productions, Inc., has been reduced to zero due to accumulated equity in net losses. The net cumulative unrecognized net losses amounted to P17 million as of Sept 30, 2014 and Dec 31, 2013.”
Sometime in 2008, ABS-CBN said “it discontinued the recognition of its share in the losses of Sky Vision and Star Cinema starting 2008. The accumulated losses in Sky Vision and Star Cinema reduced the carrying value of the Parent Company’s investment in Sky Vision and Star Cinema to zero.”
Seven years ago, ABS-CBN had apparently not given up yet on Star Cinema, hoping for its eventual rebound. Should this happen, it said, it “will resume recognizing its share in these profits if the Parent Company’s (referring to ABS-CBN) share in the cumulative unrecognized net profits exceeded the cumulative unrecognized net losses.”
ABS-CBN’s expected profitability did not happen because Star Cinema’s “net cumulative unrecognized net losses amounted to P17 million and P14 million as of Dec 31, 2012 and 2011, respectively.”
Will Aquino’s star shine brighter to be able to save Star Cinema from further losses and financially revive it?
Finally, for the sake of their market investors, ABS-CBN and Jollibee should make public the talent fees they are paying Aquino. By their transparency, they could review their investment strategies and prepare an alternative to their stocks. The two companies should prioritize their disclosures, particularly their donations to the campaign funds of Malacañang’s temporary chief occupant, who happens to be her brother.