Lopezes, other insiders own ABS-CBN preferred shares
Emeterio Sd. Perez
AS a media conglomerate, ABS-CBN Corp. (ABS-CBN), formerly ABS-CBN Broadcasting Corp., listed in a general information sheet (GIS) 38 companies which are either subsidiaries or affiliates. It has authorized capital stock consisting of 1.3 billion common shares with par value of P1 per share and 1 billion preferred shares with par value of P0.20 per share.
Of its authorized capital stock, 1.872 billion shares are subscribed and paid-up. This represents ABS-CBN’s outstanding shares divided into 872.124 million common shares and 1 billion preferred shares.
Since ABS-CBN is a media company, it doesn’t have foreign stockholders. The constitution limits ownership of media entities to Filipinos.
In the same GIS, ABS-CBN listed Lopez Inc. as owner of 480.934 million common shares, which, as of 2018, were equivalent to 55.145 percent of 872.124 million outstanding common shares. PCD Nominee Corp. held 373.282 million ABS-CBN common shares or 42.801 percent for various beneficial stockholders.
“Others”, referring to the rest of stockholders, held 11.991 million ABS-CBN common shares or 1.375 percent.
Of one billion ABS-CBN preferred shares, Lopez Inc. owned 987.130 million or 98.713 percent. As the unlisted company of the Lopezes, its holdings were equivalent to 98.713 percent of outstanding one billion preferred shares.
In its GIS, ABS-CBN placed at P200 million the total value of preferred shares held by the Lopezes and other insiders. When divided by P0.20 par value, the result showed one billion preferred shares which are the company’s outstanding preferred capital stock.
Compensation
According to ABS-CBN, it paid the 11 members of its board P515.458 million “in the preceding fiscal year,” apparently referring to 2017 before it held its annual stockholders’ meeting on April 19, 2018. The amount is equivalent to 16.294 percent of the broadcast group’s consolidated net income of P3.164 billion in 2017.
The public may ask: Why separate the compensation of directors from what are usually posted on the website of the Philippine Stock Exchange?
The answer or answers should come from either the Securities and Exchange Commission or PSE itself. The poser here is: Will SEC officials and PSE managers stand up against listed companies and their owners?
The compensation was detailed in a filing by ABS-CBN. It identified the six highest paid executives as Carlo L. Katigbak, Aldrin M. Cerrado, Laurenti M. Dyogi, Ma. Lourdes N. Santos, Rolando P. Valdueza, and Ma. Socorro V. Vidanes.
As a group, Katigbak and company were paid in 2017 salary of P164.581 million; bonus of P137.445 million; and other annual compensation of P27.872 million. ABS-CBN estimated their salary at P172.810 million for 2018.
The compensation filing showed that in 2017 “all managers and up as a group unnamed” got salary of P2.403 billion, bonus of P924.566 million and other annual compensation of P378.556 million.
POR filing
ABS-CBN said in a public ownership report (POR) that as of March 31, 2018, the company’s public stockholders owned 367.604 million common shares or 42.636 percent of 862.193 million common shares which were then outstanding. It said its nine directors held, either directly or indirectly, 1.815 million ABS-CBN common shares or 0.211 percent.
The company’s officers held 1.634 million ABS-CBN common shares or 0.19 percent.
The same POR listed two principal stockholders such as Lopez Inc. with 480.934 million ABS-CBN common shares or 55.78 percent and ABS-CBN Holdings Corp. with 324.244 million ABS-CBN common shares or 37.607 percent.
These two principal stockholders combined for ownership of 805.178 million ABS-CBN common shares or 93.387 percent.
With ABS-CBN’s public stockholders owning 367.604 million common shares or 42.636 percent, the sum exceeded 100 percent at 136.023 percent.
How did this happen?
Even an earlier POR listed the public as holders of 367.603 million ABS-CBN common shares or 43.207 percent of 850.801 million outstanding ABS-CBN common shares as of Dec. 31, 2017.
Due Diligencer’s take
With the Lopezes as the majority owners of one billion ABS-CBN preferred shares along with other company insiders, they control the 11-person board and appoint two independent directors.
That’s how ABS-CBN and other listed companies control the board. The Lopez family and company insiders control the board which is the policy-making body. This could be the reason why the public investors who trade on listed common shares are never allowed to get elected directors.
As Due Diligencer has been pointing out in the past, instead of the public, listed companies name their choice independent directors who may not be tolerated to oppose the majority. Otherwise, they would be out of the board.
Like the other owners of listed companies, the Lopezes have some explaining to do how they did their computations. How come ABS-CBN credited the public with more than 40 percent?
Isn’t it also ironic that the percentage total topped 100 percent when it should not? If a little over 100 percent would send the public seeking explanation, they would be more puzzled with the percentage total of 136.023 percent.
Perhaps, my addition is wrong. But percentages are percentages that ABS-CBN presented in its own POR filings. It’s up to the Lopezes to do their own computations.
Of course, the Lopez-owned and controlled broadcast conglomerate is not the only one to have attributed too many common shares to the public. There are several that do the same.
Will ABS-CBN be different from others? Just asking.
esdperez@gmail.com
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