PSE’s P250-M dividend from subsidiary

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EMETERIO SD. PEREZ

EMETERIO SD. PEREZ

IF you are among the public stockholders of the Philippine Stock Exchange who bought PSE shares at its 52-week low of P290, you are lucky if you sold your holdings at the stock’s 52-week high of P361.20. On Monday, PSE shares closed trading at P292.

If you were caught by the stock’s fall, you may still be holding on to your PSE shares today. In this case, you are in for some bad news: PSE’s net income plunged 37.4 percent to P450.2 million in the first nine months of 2015 from P719 million in the same period in 2014.

Despite the decline in its profits, don’t feel hopeless, though. PSE still looks good and could even perform better in 2016. As of Sept. 30, 2015, it reported unappropriated retained earnings of P1.06 billion, based on its consolidated financial posting. As parent company alone, it had, as of Dec. 31, 2014, P960.8 million in unappropriated retained earnings and P71 million appropriated retained earnings.

In Note 27 of its annual financial statements, PSE explained the P71 million in appropriated retained earnings. “In 2007, the BOD [board of directors]appropriated a portion of its retained earnings amounting to P3 million to cover for potential liability cases filed against the Exchange, its directors and/or officers.”


In the same footnote, PSE disclosed that as of Feb. 25, 2015, “the said cases are still pending before the courts and quasi-judicial agencies. The additional entry could be bad news for the public because said appropriation that would be taken from PSE accumulated net profits “will be reassessed periodically to reflect material developments made known to the Exchange.”

P250-M dividend
As PSE president, Hans B. Sicat knows what’s in store for the company’s stockholders. After all, because he is also the chief executive officer, only he could tell the public that the board may be more generous to the stockholders next year.

Yet, Mr. Sicat would not do this because to do so would mean premature disclosure of material facts, which could subject him to potential investigation by the Securities and Exchange Commission (SEC).

Anyway, PSE has already disclosed a significant accounting entry in its first quarter report in 2016, which is not premature disclosure. By now, its public stockholders should know about the declaration of a P250-million dividend by the Securities Clearing Corporation of the Philippines (SCCP), which is payable on Jan. 15, 2016.

Because SCCP is a wholly owned subsidiary of PSE, the more curious investors among the public who read the postings on PSE website are already aware of said bonanza. Are there more dividends coming from the other subsidiaries?

What a way for PSE to welcome the New Year!

Compensation decline
If PSE’s profitability suffered in the first three quarters of 2015, so did the salaries and wages its workers received during the period. In its compensation filing, PSE said these salaries and wages declined to P139.8 million from P140.1 million in the same period in 2014.

Incidentally, the question is, did the numbers mean each of PSE’s 137 employees as of Sept. 30, 2015 receive P1.02 million in the nine months, or P113,444 a month? This compensation profile should make the exchange among the Philippines’ more generous employers.

If PSE has been generous to the rank-and-file workers, it proved itself even more generous to the members of its management team as a group. Here are some numbers:

In 2014, PSE’s executive compensation totaled P55.6 million, divided into salaries of P38.97 million and bonuses of P16.63 million. Of the total, P38 million—salary, P26.26 million, bonus, P11.76 million – went to the top five executives: Sicat, Roel A. Refran, senior vice president; Marietta U. Tan, Angel G. Astudillo, and Rachelle C. Blanch, vice presidents. The remaining P17.57 million—divided into salary of P17.57 million and bonus of P4.87 million—went to the rest of the executives.

In 2013, PSE paid its managers P51.13 million, divided into salary of P40.49 million and bonus of P10.64 million. Of the total, Sicat and four others received P34.81 million—salary, P27.24 million, bonus, P7.57 million—while the rest of the team got P16.32 million—salary, P13.25 million, bonus, P3.1 million.

With only a few days left before 2015 draws to a close, here is PSE’s compensation estimate: By the end of the year, this would total P52.65 million, of which P42.37 million would be salary and P10.28 million bonus. Of the total, the top five executives would be paid P33.88 million, of which P27.03 million would be salary and P6.85 million bonus. The remaining P18.77 million—P15.32 million in salary, P3.44 million in bonus—would go to the rest of PSE’s management team.

esdperez@gmail.com.

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