PNB execs’ P2-B compensation for 2014-2016

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Emeterio Sd. Perez

AS a listed company, Philippine National Bank (PNB) may be perceived by public investors as more public than others because it has 29,947 stockholders. Of the total, 29,842 are Filipinos, who own 1.135 billion common shares, or 90.827 percent, and 105 are of various foreign nationalities who hold 114.582 million common shares, or 9.173 percent.

In the general information sheet (GIS) posted on the website of the Philippine Stock Exchange, PNB did not indicate the citizenship of 14 foreigners. It listed them only as “non-Filipino.” It attributed to them 114.346
million common shares, or 9.154 percent.

Computed at the stock’s last traded price of P60 on Monday, these 14 “non-Filipinos” are the richest among PNB’s stockholders, with combined paper wealth of P6.861 billion. As a matter of fact, their holdings even top the average number of PNB common shares owned by 29,842 Filipinos who hold 38,019 common shares. At P60 per share, this translates to P2.281 million.

As a regulatory authority, the Securities and Exchange Commission fails public investors by not requiring the bank to submit a detailed ownership report. Its officials allow the bank to simply “paste” the list of the bank’s top 100 stockholders posted on the PSE website, which identifies the PCD Nominee as the largest non-Filipino stockholder.


Ownership reports

If the PCD Nominee is only a record stockholder, the SEC should have required PNB to identify the beneficial owners of 114.326 million PNB common shares, or 9.152 percent.

By imposing on PNB, along with other listed companies that are not necessarily public, the SEC would be providing the public investors the information that they need in assessing the reliability of a listed stock.

If the public investors were to rely only on GIS, they would not know their fellow stockholders, especially the significant owners among them. To learn more about PNB and its stockholders, they have to read the bank’s public ownership report (POR).

In its POR posting, PNB listed 27 corporate stockholders, which all belong to the LT group. They hold a total of 747.327 million common shares, or 59.88 percent.

LT is businessman Lucio Tan, minus his middle initial C.

In the same filing, PNB listed 825.177 million of its 1.249 billion common shares as listed a while 986.433 million common shares are non-public. It credited the public with 262.706 million common shares, or 21.03 percent.

The patriarch

On July 17 this year, Tan, the businessman and family patriarch, will turn 84 years old.

As the man behind the LT Group of Companies, he has not retired and certainly not about to retire yet.
Mr. Tan has successfully built a conglomerate that owns, among a number of businesses, aside from PNB, Philippine Airlines, Fortune Tobacco Corp., Asia Brewery Inc. and the University of the East.

A Chinese Filipino, Mr. Tan was born in Xiamen, China. A definitive information statement (DIS) filed by PNB listed him as Filipino.

On educational achievement, the same DIS filed by PNB listed Mr. Tan as a holder of Bachelor of Science in Chemical Engineering degree from the Far Eastern University. He is a Doctor of Philosophy, an honor granted him by the University of Santo Tomas.

As a member of PNB’s 15-person board, Mr. Tan was among the directors who were paid a total of P44.325 million in 2014, which dropped to P41.95 million in 2015. The compensation translates to P2.955 each and P2.80 million each in the two-year period.

Executive compensation

In a compensation filing, PNB named its five highest paid executive officers as follows: Reynaldo A. Maclang, president; Cenon C. Audencia Jr., Horacio E. Cebrero 3rd, Christopher C. Dobles and Nelson C. Reyes, executive vice presidents.

As a group, Maclang and company received salary of P50,590,483 and bonus of P12,041,581 for a total of P62,732,064 in 2014; P58,902,884 and P19,601,169 for a total of P78,504,053 in 2015. It estimated their pays and perks for 2016 at P94.3 million.

In the same filing, PNB said it paid “all other officers and directors (as a group unnamed)” salary of P2,606,668,197 and bonus of P843,788,872 in 2014 and P3,280,311,093 and P952,903,245 in 2015. For 2106, it projected their compensation at a total of P5.08 billion.

All these compensations, that is, from 2014 to 2016, amounted to P1,999,207,524 show how expensive to maintain a bank’s executives.

In a consolidated audited financial filing, which included subsidiaries, PNB spent P8.235 billion in 2015, P7.43 billion in 2014 and P5.873 billion as “compensation and fringe benefits” for all employees.

Computed, PNB’s “compensation and fringe benefits” translate to 43.535 percent of the bank’s total operating expenses of P18.916 billion in 2015; 38.684 percent of P19.207 billion in 2014; and 34.853 percent of P16.852 billion in 2013.

It’s either that Mr. Tan is very generous with his employees or it is really expensive to operate a business like PNB.

esdperez@gmail.com

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