Stock options for privileged insiders

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Emeterio Sd. Perez

SHARES classified as stock options are usually issued and sold to managers, who enjoy the privilege of buying shares at discounted prices. Ayala Corp. (AC) is an example of a listed company that rewards its managers with AC common shares. In one filing, it reported having issued 7,844 to insiders under stock options.

For example, Solomon M. Hermosura, general counsel, corporate secretary, compliance officer and data protection officer, bought AC common shares in what a filing defined as the “exercise of 2011 stock options.” The disclosure showed his acquisition of 6,187 common shares at P264.06 apiece.

With the additional acquisition, Hermosura’s holding of common shares in AC under stock options grew to 128,502 as of Aug. 16, 2017.

At a closing price of P944 on Wednesday, the AC common shares held by Hermosura put him way ahead by P679.94. But that’s only a paper gain, unless he unloaded his shares.


Pays and perks

The five highest paid executives of Megawide Construction Corp. are Michael C. Cosiquien, chairman and chief executive officer; Edgar B. Saavedra, president and chief operating officer; Oliver Tan, chief financial officer; Jesus Chua, chief strategy officer; and Manuel Louie Ferrer, chief marketing officer.

As a group, they received P65.51 million in annual salaries and P5.95 million in bonuses in 2015. Last year, they were paid a bigger amount of annual salaries of P70.92 million, but with bonuses lower at P920,000. This year, the company estimates the group’s annual basic pay at P74.47 million and bonus at P960,000.

Megawide’s other officers who were not among the top five highest paid got annual basic salaries of P11.63 million combined, and bonuses of P1.90 million in 2015. Their pays and perks rose to P29.18 million and P4.05 million in 2016. This year, Megawide projects they will receive a combined annual basic salary of P30.64 million and bonus of P4.26 million.

The six-person board, according to Megawide, “shall receive a reasonable per diem allowance for attendance at each board meeting,” as provided for under the company’s bylaws.

In an explanatory note to its compensation package, Megawide said its board has approved a director’s per diem of P20,000 per board meeting and P30,000 cumulative monthly allowance in the form of reimbursable expenses for each regular director.

Megawide has two independent directors, namely former chief justice Hilario G. Davide Jr. and Leonilo M. Coronel, who were paid more than their regular counterparts on the board. The company said the two would be paid “P25,000 per diem per board meeting and P30,000 cumulative allowance in the form of reimbursable expenses.”

Due Diligencer’s take

IF you are looking for the names of beneficial stockholders who own shares in listed companies, you will find them not just in one filing. As a matter of fact, you have to surf through various disclosures. In other words, the actual or beneficial stockholders are not what the list of top 100 stockholders shows them to be, which, more often than not, shows PCD Nominee Corp. leading the roster.

If you go over the general information sheet (GIS) in the hope your search will be fruitful, you may likewise be disappointed. The GIS does not always tell you who the beneficial stockholders are in such-and-such-listed-but-not-necessarily-public company.

For example, the latest GIS of Vantage Equities Inc. listed 602 Filipinos as owners of 4.192 billion common shares, accounting for a 99.83 percent stake in the company, and 11 foreigners as holders of 7.116 million common shares.

All in all, Vantage Equities has 613 stockholders, who own 4.2 billion common shares, representing the company’s entire outstanding common shares, based on that record.

Vantage Equities also reports in that GIS that it has 135,599,500 treasury shares, representing 3.32 percent. But that is equivalent to only 3.229 percent based on the company’s 4,199,582,266 outstanding common shares. Could it mean the company had issued a total of 4,199,582,266 shares, including the treasury shares?

By the way, what could Vantage Equities mean when its GIS showed 4,199,582,266, as outstanding common shares, equal to 58919.30 percent? Garbled, perhaps? Just asking.

esdperez@gmail.com

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