MANILA Broadcasting Corp. (MBC), which was incorporated on Sept. 30, 1947, has a unique organizational chart in that it employs only three executives who are also the most highly compensated. They are Fred J. Elizalde, chairman and chief executive officer; Jose Taruc, vice president-DZRH; and Elpidio Macalma, assistant vice president-DZRH.
The new management setup resulted from MBC’s “Hating Kapatid System,” which it started implementing in 2002.
“Under the system,” MBC said in a posting on the website of the Philippine Stock Exchange, “the operations of each radio station and support functions were outsourced to service companies managed and operated by former station managers and officers of the company.”
Pay and perks
MBC disclosed the three executives’ pay and perks over a five-year period—that is from 2010 to 2014—instead of only three years. It estimated the amounts for the 2015.
From 2010 to 2014, MBC said it paid Elizalde P6.5 million each year, the same amount that it would pay him in 2015. In addition, it said it also paid him P22,222 as director’s fee.
MBC did not disclose the compensation of Taruc and Macalma in 2010. It explained the omission thru a footnote in which it explained that the amount for 2011 covered “the period Oct. 1 to Dec. 31, 2011” because Taruc and Macalma’s previous employer “prior to Oct. 1, 2011 was RH Broadcasting Inc.”
In the next four years, that is, from 2011 to 2012, MBC paid Taruc P422,372 basic salary for the “period Oct. 1 to Dec. 31, 2011; P1.76 million in 2012; P1.4 million in 2013; P1.45 million in 2014; and (estimate only) P1.45 million in 2015.
In the same compensation filing, MBC said it paid Macalma P422,372 from Oct. 1 to Dec. 31, 2011; P694,270 in 2012; P622,270 in 2013; P659,436 in 2014; and (estimate only) P660,000 in 2015.
In addition, Taruc received an additional P22,222 as member of the board in 2011 and talent fee of P394,559 in 2014 and (estimate only) P400,000 in 2015.
Macalma received bigger talent fees than Taruc: P2.8 million in 2012; P1.5 million in 2013; P712,232 in 2014; and (estimate only) P700,000 in 2015.
As of Dec. 31 2014, MBC reported only P224.4 million in retained earnings. This despite net income of P132.7 million last year; P99.2 million in 2013; and P87.4 million in 2012. These profits alone totaled P319.3 million.
Don’t blame Elizalde and his fellow directors or even Taruc and Macalma for MBC’s dwindling retained earnings. Instead, find time to review the radio company’s financial filings and you will find the main reason for the company’s small amount of retained earnings.
MBC’s financial postings showed the distribution of dividends as the “culprit” for its declining surplus. Its few public stockholders should know this because they should have benefited from the following dividends: P0.25 per share in 2014; P0.18 in 2013; and another P0.18 in 2012.
Elizalde Holdings Corp. and Elizalde Land Inc. are MBC’s majority stockholders, owning 139.56 million shares, or 34.66 percent, and 87 million shares or 21.61 percent, respectively. The others include Romulo Mabanta Buenaventura Sayoc and delos Angeles law offices, 69.9 million shares, or 17.36 percent; Cebu Broadcasting Co., 50 million shares, or 12.42 percent; and AQG Corp., 33 million shares, or 8.20 percent.
In a footnote, MBC said Romulo Mabanta holds MBC shares as “trust fund for the Elizalde family.”
In a public ownership report, MBC listed six top stockholders led by Elizalde Holdings and Elizalde Land. Together, they own a total of 361.47 million shares, or 89.76 percent, leaving the public with 41.17 million shares, or 10.23 percent. Insiders hold 38,667 shares.
Incidentally, MBC may be among the stock market’s thinly traded stocks. On Oct. 28, 2015, only 100 MBC shares changed ownership at P32 per share.