ALLIANCE Select Foods International Inc. paid its five top executives in 2012 and 2013 a total P35.605 million and the other officers and directors P67.904 million. That’s a total of P103.509 million, or $2.525 million computed at P41 per dollar, for all the members of the company’s management team.
So huge was the executive compensation Alliance Select has showered on its executives but which the public stockholders must not have been aware of. In fact, the stockholders including the Singaporeans, outside the majority, must know by now that their investments have ended up paying for the pays and perks of the five highest-paid executives and other officers as a group of Alliance Select.
In short, in trusting them, the public stockholders expected something in return, say in terms of financial performance to make them proud of the company’s management.
Sadly, Alliance Select under an independent director and the Dees was a big disappointment. In paying its managers $2.525 million in 2012 and 2013, what it gave back was a consolidated loss of $2.919 million. Wow! That’s P119.679 million at P41 per dollar.
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Incidentally, George Sycip, chairman of the board, was not one of the five executives who received P14.513 million in salaries and P811,000 bonuses in 2012 and P19.348 million and P933,000 in 2013.But he was among the “other officers and directors unnamed” who were paid much more—P28.671 million in salaries and P1.125 million in bonuses in 2012 and P36.693 million and P1.415 million in 2013.
With their highly-paid executives, the minority stockholders of Alliance Select should do some computations, the results of which would shock them. Worse, their findings would probably make them suspect that the majority stockholders have not only been ignoring them but have also been taking them for a ride.
For the biggest shocker: the company’s board chaired by Sycip, rewarded the “other officers”—probably including himself—with 27.896-percent increase in their compensation to P38.108 million in 2013 from P29.796 million in 2012. That percentage was equivalent to P8.312 million.
Will Alliance Select tell the public who among the following got the biggest slice of the compensation pie: Jonathan Y. Dee, president and chief executive officer; Teresita Ladanga, executive vice president and chief operating officer; Paulino Servado Jr., senior vice president chief financial officer; Joanna Laurel, treasurer; and Rajat Balain, vice president-corporate planning.
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Of course, Chairperson Teresita Herbosa and the four commissioners of the Securities and Exchange Commission may not have the power to interfere with a listed company’s financial affairs. But they could at least review the audited financial statements of Alliance Select to find out the reason or reasons for the changes in numbers in the report.
For example, in its 2011 annual financial filings, Alliance Select, reported a net loss of $951,663 but as restated, the amount increased to $1.053 million, which was reduced by some other entries to $996,490.
For 2013, Alliance Select, audited by NavarroAmper & Co., a member of Deloitte Touche Tohmatsu Ltd., recorded a net loss of $2.919 million, which resulted from revenues of $84.328 million. The public hopes the amount would stay as it is today and not get bloated when it is restated next year.
It is not only the SEC that should get involved in protecting the small investors in Alliance Select and other listed companies.
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The leadership of the Philippine Stock Exchange may also want to take the initiative of preventing a mass withdrawal of foreign money from the local stock market by looking into the fishing ventures of the company that takes pride in getting bigger by acquisitions possibly using borrowed funds. As of March 31, 2014, the company reported “bank and mortgage loans amounting to $36,592,476,” or P1.50 billion at P41 to a dollar, up 10.298 percent from $33,175,879 as of December 31, 2013.
For the sake of the public, the market watchers of both the SEC and the PSE may want to try to analyze more closely the 2014 unaudited first quarter report of Alliance Select to see how the company arrived at $817,547 net income, which could be misleading. Due Diligencer is not telling the regulators why. Let them find out the lies behind the numbers.