No retirement for Gokongwei?

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Emeterio Sd. Perez

Emeterio Sd. Perez

As the family patriarch, businessman John Gokongwei Jr. is not about to “abandon” JG Summit Holdings Inc. (JGS) which he founded and began operating in 1957. Fifty-eight years after, at the age of 88, he remains a member of JGS’ 11-person board and “certain of its (JGS) subsidiaries.” He is also the board’s chairman emeritus.

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A JGS filing attributed to Gokongwei direct ownership of 816.9 million shares, or 11.4 percent. At the stock’s close of P72.50 on Monday, his JGS shares had a market value of P59.2 billion.

The amount of P52.2 billion, which represents Mr. Gokongwei’s “paper wealth” in JG Summit, is equivalent to 64.8 percent of P92.5 billion, which is the value on paper the family-held 1.28 billion JGS shares.

As shown in JGS’ ownership filing, here are the other family members’ wealth based on the value of their direct JGS’ holdings, computed at P72.50 per share: James Go, brother of Mr. Gokongwei, 148.68 million shares – P10.8 billion; Lance Gokongwei, son, 235.5 million shares —P17 billion; Patrick Henry C. Go, nephew, 93,500 shares—P6.8 million; and Robina Gokongwei-Pe, daughter, 74.1 million shares—P5.4 billion.

Lily Ngochua, who is listed under “other directors, executive officers and nominee,” directly holds 388,018 JGS shares, worth P28.1 million.

Executive compensation
JG Summit had a reason for excluding Lily Ngochua from the list of top stockholders although she directly owns more JGS shares than Patrick Henry Go: She is not among the five well-compensated executives of the family-controlled holding company.

As JGS’ biggest single stockholder and chairman emeritus, businessman Mr. Gokongwei tops the list of five highest paid executives of JG Summit. The other four are James Go, Patrick Henry Go, and Lance Gokongwei and his sister Robina Gokongwei-Pe.

JG Summit paid the five family members a combined salary of P111.3 million; bonuses of P2.1 million; and other pay and perks of P370,000 for a total of P113.8 million in 2014. This year, JGS estimated their combined salary at P125.5 million; their bonuses at P2.1 million; and other pay and perks at P475,000 for a total of P128 million.

JSG paid in 2014 “all other officers and directors as a group unnamed” a combined salary of P168.8 million; bonuses of P3.6 million; and other pay and perks of P510,000 for a total of P172.95 million. It estimated the group’s total compensation this year at P181.2 million divided into P176.9 million in salaries; P3.6 million in bonuses; and P715,000 in other pay and perks.

Annual meeting
With four corporate stockholders led by The Wellex Group Inc. controlling 65.4 percent of Waterfront Philippines Inc., there is no need for the public to attend the company’s annual stockholders’ meeting.

The Gatchalians took Waterfront public in 1995 to be able to raise money. The successful initial public offering of WPI shares qualified the company to list 1.95 billion of its 2.5 billion outstanding shares.

Unluckily for the public who may still be trading WPI shares that are listed on the Philippine Stock Exchange in Makati City, they may not be able to attend Waterfront’s annual meeting, scheduled to be held at 10:00 a.m. on September 12. It is because the venue would be Waterfront Cebu City Hotel, in Lahug Cebu City, which is too far for the public to fly and return to Manila in the late afternoon of the same day. Will the management pay for their fares and hotel accommodations?

For their business convenience, the Gatchalians give Waterfront’s business address at the 7th Floor, Manila Pavilion Hotel, United Nations Avenue corner Ma. Orosa Street, Manila.

Like other listed companies, Waterfront has this suggestion for the public: “If you are not attending, you may submit a proxy instrument to the office of the Corporate Secretary of this Corporation . . .”

If you are among the “outsiders,” would you waste your time filling up the proxy form only for the Gatchalians or any other group of stockholders to vote your shares?

Still on Waterfront
If you are among the public investors who are stuck with Waterfront shares that are now trading below par, you can still participate in Waterfront’s annual stockholders’ meeting. You have time enough to send your questions about the company’s deficit to the corporate secretary.

As individual stockholders, you have the right to know when and how a public company would be able to erase its losses that had accumulated into a deficit of P1.2 billion as of March 31, 2015. Waterfront reported additional paid-in capital (APIC) of P706.36 million which, if applied to cover the deficit, would certainly not be enough to wipe out said deficit.

You should be told what has been financially hurting Waterfront as a group of companies. Which among its subsidiaries, for instance, have not been contributing to the group’s profitability and what does the management intend to do about them? From information you would get from the Gatchalians—should they care to respond at all—you would learn to intelligently and not emotionally react to the stock’s surprising market performance.

esdperez@gmail.com.

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1 Comment

  1. I Remember... on

    Why Gokongwei’s Robinsons Land does not give title of condominium units to the owners? Over 4 years now.. all owners have fully paid their unit.. and this company keeps the titles for her! In most countries, this is embezzlement.

    So if this is Gokongwei’s way to make money and big salaries… it is not a solid company!