Preferred shares issued by listed companies are, strictly speaking, loans extended to them either by the public investors or the majority stockholders. The former classification refers to outsiders who are not affiliated with the owners or majority stockholders but include some insiders.
Because of their loans to listed-but-not-public companies, the public stockholders are entitled to receive dividends which are usually fixed per annum such as 6.5 percent a year. Being public and outsiders, their loans to listed companies issued them non-voting preferred shares. The voting preferred shares are usually reserved for the owners.
For example, Phoenix Petroleum Philippines Inc. (PPP) reported in an information statement, which can either be preliminary or definitive, 1.403 billion outstanding PPP common shares and 20 million PPP preferred shares. Both classes have par value of P1 each.
As chairman of Phoenix’s 11-person board, Domingo T. Uy directly holds 10,000 preferred shares. The other holders of said preferred shares are Romeo B. De Guzman, 25,000; Consuelo Ynares Santiago, 10,000; and John L. Ong, 30,000.
Among the top 100 stockholders as of Dec. 31, 2018, Phoenix listed PCD Nominee Corp. as record holder of 12.459 million preferred shares, or PRP3A, equivalent to 99.694 percent, for Filipinos, and 28,190 PRP3A for non-Filipinos. The other holders of preferred shares, or lenders, are Antonio T. Chua, 9,500, or 0.076 percent; Teddy A. Gaerlan, 1,000, or 0.008 percent; and Iris Veronica Go Lim, 2,000, or 0.016 percent.
Pays and perks
In the same information statement, Phoenix listed the compensation of key management personnel in 2017 to have totaled P80.452 million in 2017 and P179.558 million in 2018. These consisted of the following: salaries, P117.51 million; honoraria and allowances, P15.073 million; SSS, PHIC, HMDF and others, P268,512, in 2017; and salaries, P117.51 million; honoraria and allowances, P50.361 million; 13th month and bonuses, P9.792 million and SSS, PHIC, HMDF and others, P1.896 million in 2018.
Either of the total compensation for “key management personnel” or separate from said amounts are the total pays and perks for the top five executives. For 2019, Phoenix projected the group’s total compensation at P52.972 million divided into salaries, P48.898 million and bonus, P4.074 million.
In 2018, Phoenix’s top five executives led by Dennis Uy received P48.157 million divided into salary, P44.453 million and bonuses, P3.704 million.
In 2017, the group was paid P43.779 million consisting of salary, P40.412 million and bonus, P3.368 million.
In 2017 to 2019, the top five and highest-paid executive officers were Dennis Uy, president and chief executive officer; Henry Albert R. Fadullon, chief operating officer; Ma. Concepcion F. De Claro, chief finance officer; Alan Raymond T. Zorilla, vice president for external affairs, business development and security; and William M. Azarcon, vice president-business development for terminals and depots.
Phoenix said in the PIS that it estimated the compensation of “all other officers and directors as a group unnamed” at P87.060 million in 2019 divided into salaries, P80.363 million and bonuses, P6.697 million. In 2018, it paid them P79.145 million divided into salaries, P73.057 million and bonuses, P6.088 million. In 2017, it paid the “unnamed group” P27.573 million of which P25.452 million as salaries and P2.121 million as bonuses.
Due Diligencer’s take
The public investors may be elated by the fact that as of Dec. 31, 2018, Phoenix Petroleum has granted under the company’s Employees Stock Option Plan (ESOP) 4,821,573 PNX common shares, which a company’s public ownership report (POR) placed as equivalent to 0.34 percent of 1.403 billion outstanding PNX common shares.
The percentage equivalent would have been laudable except for the fact that Phoenix attributed to the same POR the ownership of the public stockholders at 186,606,618 PNX common shares, or 13.30 percent. To recompute, 186,606,618 over 1,403,304,232 equals 0.13297659 or 13.298 percent.
If Dennis Uy, the businessman, would compute his employees’ share in his 51.27 percent PNX holdings, or 719,467,530 PNX common shares, he would come out with 0.259 percent, which would be equivalent to 186,342,090 PNX common shares and not 186,606,618 PNX common shares, or 13.30 percent as Phoenix’s POR showed in the POR.
Incidentally, the recipients of Phoenix’s ESOP included Dennis Uy and the company’s “top four executives and all current executive officers as a group.”
As shown in Phoenix’s information statement, the top five executives got 1.318 million ESOP shares, or 27,919 percent of 4,720,800 ESOP shares; other executives, 1.104 million ESOP shares, or 23.386 percent for total allocations of 2.44 million ESOP shares, or 51.305 percent. “All qualified employees were granted 2,298,800 ESOP shares, or 48.695 percent.
Was Phoenix’s distribution of 4,720,800 ESOP shares fair to the rank-and-file employees? Just asking.