PT&T to pay chief, 5 other execs P25M in 2018
Emeterio Sd. Perez
ERNESTO L. Cui, president and chief executive officer of Globe Telecom Inc., heads the list of the company’s five highest paid executives.
The four others are Alberto M. de Larrrazabal, chief commercial officer; Rebecca V. Eclipse, chief customer experience officer; and Gil B. Genio, chief technology and information officer and chief strategy officer.
Globe Telecom paid Cui and company in 2016 salary of P100 million. It also paid them bonus of P105 million for total compensation of P205 million.
In 2017, Globe reduced by P1 million to P204 million the payand perks of the top five executives. However, it estimated their salaries at P114 million for 2018 and their bonuses at P111 million for a total of P225 million.
Summing up, Globe Telecom spent P4.907 billion in paying its executives in 2016 and 2017. The amount would reach P7.58 billion including the company’s executive compensation estimate for 2018, which would amount to P2.673 billion.
Ayala Corp. (AC) owns thru Asiacom Philippines Inc. Globe Telecom’s 158.515 million voting preferred shares, or 50.9 percent, and 41.157 million common shares, or 13.22 percent.
Singapore Telecom International Pte. Ltd. holds 62.646 million Globe Telecom’s common shares, or 20.12 percent.
Globe Telecom based AC’s ownerships and that of SingTel on its outstanding capital stock of 311.432 million shares divided into 132.917 million common shares, 158.515 million voting preferred shares, and 20 million non-voting preferred shares.
Compensation
In 2016 and 2017, AC listed the following as most highly paid executives: Jaime Zobel de Ayala, chairman and chief executive officer; Fernando Zobel de Ayala, president and chief operating officer; Solomon M. Hermosura, managing director, chief legal counsel, corporate secretary, compliance officer, and corporate governance group head; Jose Teodoro K. Limcaoco, managing director, chief finance officer, chief risk officer, chief sustainability officer and finance group head; and John Philip S. Orbeta, managing director, chief human resources officer, and corporate resources group head.
In 2016, AC paid the five-executive group salaries of P258.70 million and bonuses of P180.89 million. In 2017, it paid them salary of P279.04 million and bonus of P210.51 million. This year, it would pay them salary of P301.36 million and bonus of P228.73 million.
In an explanatory note, AC’s “all other officers” refers to “managers and up (including all above-named officers.” If “all other officers” were to include the Zobel brothers and AC’s three other managing directors, then the formula should be P258.70 million plus P180.89 million plus P279.04 million plus P210.51 million plus P301.36 million plus P228.73 million. P1.459 billion divided by P3.377 billion equals 43.204 percent.
The series of computations would mean 43.204 percent of P3.377-billion executive compensation in a three-year period, including estimates, went to the Zobel brothers and the three other top executives.
In Footnote 21, AC explained that “retained earnings include the accumulated equity in undistributed net earnings of consolidated subsidiaries and associates and joint ventures amounting to P116,104.3 million, P93,176 million and P73,277.3 million as of Dec. 31,2017, 2016 and 2015.”
This would mean by deducting P116,104.3 million from AC’s retained earnings of P170,302.028 million in 2017, the difference would be P54,197.728 million, or P54.198 billion, the amount of retained earnings that belonged only to AC in 2017.
PT&T’s P11.365-B deficit
The amounts of retained earnings of Globe Telecom and of AC are presented here to compare them with the financial performance of Philippine Telegraph and Telephone Corp., which reported equity deficit of more than P11.365 billion and capital deficiency of P9.206 billion as of March 31, 2018.
The quarterly report is not audited but it nevertheless tells public investors what to expect from the company in which they still own common shares.
Besides, Globe Telecom and AC are both profitable.
It may be a blessing that PT&T has succeeded in reducing its equity deficit from P11.403 billion as a result of the company’s net income of P38.258 million as of March 31, 2018.
Will Menlo Capital Corp., as holder of 560 million PT&T common shares, or 37.33 percent, succeed in making PT&T profitable again and reduce its equity deficit over the succeeding years?
Menlo and PT&T’s other significant stockholders would be carefully watched by the public, who, as of latest public ownership report (POR) were credited with 239.759 million PT&T common shares, or 29.97 percent of 799.999 million common shares.
Even if Menlo is not one of PT&T’s significant stockholders, still, the public stockholders would be cautious in trading their PT&T common shares. What if the company is allowed to go back to the market by listing its newly issued 1.5 billion common shares?
Due Diligencer’s take
PT&T may be the listed stock to watch under Menlo. After all, it was a losing company and still is with equity deficit of more than P11 billion.
Will PT&T be able to return to profitability? This is what the public should be asking now.
The question should not be confined to PT&T’s future financial performance. Rather, it should focus more on the compensation of the company’s “president and five other highest compensated officers.”
In 2017, as a group, they were paid salary of P12.12 million, bonus of P360,000 and “other annual compensation of P864,000.
In 2016, they received salary of P11.855 million and the same bonus and other pays and perks they were paid in 2017.
In 2017, “all other officers and directors as a group unnamed” were paid salary of P1.65 million, bonus of P18,000 and other pays and perks of P672,000.
They were paid salary of P1.645 million and the same bonus and other pays and perks in 2016.
Now, here is what PT&T’s public stockholders should ask the company’s management: How did the company arrive at P25 million as estimated compensation of the “president and five highest compensated officers” for 2018?
What for is P273,000 additional compensation for the same year? Just asking.
esdperez@gmail.com
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