Listed shares do not make a company public
Credit to Author: EMETERIO SD. PEREZ| Date: Sun, 19 May 2019 16:33:25 +0000
House of Investments’ (HI) authorized capital stock (ACS) of 1.25 billion and 615,996,114 outstanding common shares are outstanding. It also has 618,535,387 outstanding voting preferred shares of 2.5 billion authorized preferred shares. The two classes of shares have par value of P1.50 and P0.40 per share, respectively.
A general information sheet (GIS) issued in 2018 showed House of Investments had 434 stockholders as owners of HI common shares. Of 434 stockholders, 423 were Filipinos and 11 were foreigners.
Of HI’s 434 stockholders, only 48 Filipinos owned 618,535,387 preferred shares which is equivalent to 100 percent of outstanding preferred shares.
As company owners, the Yuchengcos, led by the estate of Alfonso T. Yuchengco, are the majority holders of 618,535,387 voting preferred shares. The estate was credited with 337,961,370, or 54.64 percent of outstanding preferred shares. As a group in 2018, the Yuchengcos held 600,639,269, or 97.107 percent of 618,535,387 preferred shares.
In a preliminary information statement (PIS), House of Investments classified 1,234,531,501 as “outstanding number of shares entitled to vote”, which includes 618,535,387 outstanding preferred shares.
The Yuchengco ownership of voting preferred shares enables the family to elect HI’s 11-person board headed by Helen Y. Dee as chairperson, according to the website of the Philippine Stock Exchange (PSE).
The same website showed five of 11 directors were independent directors, who, presumably, are also appointed by the Yuchengcos.
Compensation
House of Investments filed its PIS with both the SEC and PSE in connection with the company’s annual meeting on July 19, 2019 at RCBC Plaza, Ayala Avenue.
In the same filing, HI also listed its five highest-paid executives as follows: Medel T. Nera, president and chief executive officer Gena O. Cheng, executive vice president, chief operating officer and treasurer; Alexander Anthony
G. Galang, senior vice president-internal audit; Raul Victor B. Tan, SVP and group treasurer head; and Joselito D. Estrella, SVP-chief information officer.
As a group, HI’s top five executives were paid salary of P29.3 million in 2017; and P33.8 million in 2018. This year, the company estimated their salary at P25.4 million.
“All other officers and directors as a group unnamed” were paid P28.3 million in 2017 and P27.8 million in 2018. In 2019, they would have been paid P28.7 million.
According to House of Investments’ GIS, the company paid its directors P720,000 in 2017. The amount is equivalent to 2.457 percent of P29.3 million HI paid to its top executives officers in 2017 and 2.544 percent of P28.3 million “all others officers and directors as a group” received in 2017.
The House of Investments’ PIS said the company’s 11 “directors are paid a per diem of P25,000 for attendance in a board meeting, which it said it holds every quarter of the year. In addition, he/she is paid “a per diem of
P10,000 for participation in audit and risk committee meeting and P5,000 in other committee meetings.”
POR filing
House of Investments attributed the ownership of 318,536,059 common shares to its public stockholders, HI’s public ownership report (POR) said. The public ownership represents 51.71 percent of 615,996,114 common shares as of March 31, 2019.
Of 615,996,114 outstanding HI common shares, Pan Malayan Management & Investment Corp. owned 294,759,570 HI common shares, or 47.85 percent of outstanding.
In an earlier POR as of Dec. 31, 2018, Pan Malayan held the same number of HI common shares accompanied by the percentage equivalent.
Although they do not elect their own directors to the board, the public stockholders’ majority holdings do not translate to even a directorship. Instead, their seats belong to five independent directors who are appointed by the Yuchengcos.
The Yuchengco-owned Pan Malayan Management also tops the list of HI’s top 100 stockholders with the same number of common shares and the percentage-equivalent. The POR as of March 31, 2019 said the public also held 51.71 percent of 615,996,114 outstanding HI common shares.
However, as record but not beneficial stockholder, PCD Nominee Corp. holds two blocks of HI common shares. It held 234,617,091 common shares, or 38.09 percent, for Filipinos and 42,081,436 common shares, or 6.83 percent for foreigners.
Due Diligencer’s take
How come listed companies pretend themselves to be public when they are not? The question is not addressed to anyone in particular but to all listed but not necessarily public companies.
As stockholders, the public should be allowed to enjoy their right as co-owners of listed companies and not treated merely as the savior of family-owned businesses. They are the public who are responsible in enabling these enterprises to get their shares listed on PSE.
Are these public stockholders good only for getting stocks listed but are not allowed to even see what a boardroom is?
Due Diligencer may be accused of being repetitious. The public should not be limited to their ownership of common shares; they should also be allowed to directly own voting preferred shares. .
After all, insiders should not be allowed to monopolize the ownership of voting preferred shares. They should even be elected directors to make family-owned stock corporations truly public.
As long as public stockholders of listed companies are denied their due representation in the boards, the very rich families will continue to enrich themselves.
Aren’t the very wealthy clans of this country list their businesses’ common shares on PSE to evade paying more taxes due the Bureau of Internal Revenue? Just asking.
esdeperez@gmail.com
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