SM and subsidiaries hit P283.039B in retained earnings

RETAINED earnings. SM Investments Corp. reported retained earnings of P283.039 billion as of end of the third quarter of 2019. Of the amount, P37 billion, or 13.072 percent, is “appropriated”, while the remaining P246.039 billion, or 86.927 percent, is “unappropriated.” The company, which belongs to the group of companies owned by the family of businessman Henry Sy Sr., tells the public to also read Note 18, which, in turn, informs them that it would use 72.973 percent of the retained earnings for debt servicing. In peso term, this amounts to P27 billion. Only P10 billion, or 27.027 percent of P37 billion would go to what SM described as “investments” in a filing.

Like other publicly traded common shares issued by listed companies, SM Investments explained in Note 18: “Unappropriated retained earnings include the accumulated equity in net earnings of subsidiaries, associated and joint ventures amounting to P229,626.1 million and P202,669.4 million as at Sept. 30, 2019 and Dec. 31, 2018, respectively, that is not available for distribution until such time

that the Parent Company receives the dividends from the respective subsidiaries, associates and joint ventures.”

Outstanding. SM Investments has 1,204,582,867 outstanding common shares. Of its outstanding, the public stockholders owned 576,946,119 SM common shares, or 47.90 percent, as of Sept. 30, 2019, topping the ownerships of the company’s three principal stockholders totaling 268,544,961 SM common shares, or 22.294 percent: Hans T. Sy, who directly owned 75,839,675 SM common shares, and indirectly held 22,929,461 SM common shares, for total holdings of 98,769,136 SM common shares, or 8.199 percent; Herbert T. Sy, with direct ownership of 98,753,008 SM common shares, or 8.198 percent; and Elizabeth T. Sy, with direct ownership of 71,022,817 SM common shares, or 5.896 percent.

With their 47.90 percent ownership, the public stockholders of SM Investments also topped the holdings of the company’s “affiliates” which owned 8.18 percent, which is equivalent to 98,538,381 SM common shares. The company listed as affiliates the following: Multi Realty Development Corp., 1,648 SM common shares; SM Prime Holdings Inc., 146,104 common shares; Belle Corp., 48,877 common shares; Syntrix Holdings Inc., 46,875,000 common shares; Sysmart Corp., 28,925,745 common shares; and Tansmart Corp., 22,500,000 common shares.

Highest paid. Harley T. Sy is an executive director of SM Investments. He is one of the company’s highest paid executives, along with Frederic C. DyBuncio is president and chief executive officer; Elizabeth Anne C. Uychaco, Senior Vice President – Corporate Services; Franklin C. Gomez, SVP – Finance; and Marcelo C. Fernando Jr., SVP, Treasurer and Group treasury.

In 2019, SM Investments estimated their salary at P110 million, their bonus at P18 million, and their “other annual compensation at P5 million, for a total of P133 million. Their other pays and perks in previous years are as follows: 2018: salary, P100 million; bonus, P17 million; other annual compensation, P4 million. 2017: salary, P89 million; bonus, P15 million; other annual compensation, P4 million.

Other insiders. SM Investments’ projected the salary, bonus and other annual pays and perks of “other officers and directors as a group unnamed” at P355 million in 2019, having paid them P323 million in salary, P54 million in bonus, and P13 million in other annual compensation in 2018 and salary of P245 million, bonus of P41 million, and other annual compensation of P10 million in 2017.

The company’s nine di rectors, according to SM’s definitive information statement (DIS), “receive a total of P100,000 per diem per board meeting and a total of P20,000 per diem per board meeting attended. Aside from the aforementioned compensation, these officers do not receive any other form of remuneration.”

SM Investments said in the DIS that it maintains a compensation committee chaired by Teresita T.

Sy with Jose T. Sio and Joseph R. Higdon as members. Inside a pair if parentheses, it said Higdon is an independent director.

Stockholders. China Banking Corp. (CBC) has 3.3 billion common shares as authorized capital stock (ACS). It has 1,904 stockholders, who own 2,685,899,812 common shares. Of these stockholders, 1,830 are Filipinos, who hold 1,961,146,815 CBC common shares, or 73.02 percent. The bank’s general information sheet ( GIS) shows 74 foreigners who hold 724,752,997 CBC common shares, or 26.98 percent.

China Bank’s list shows PCD Nominee Corp. is record stockholder for foreign beneficial owners of 717,383,241 CBC common shares, or 26.71 percent, and 564,921,885 CBC common shares for Filipinos.

SM Investments Corp. holds 461,975,661 CBC common shares, or 17.20 percent. Followed by Sysmart Corp., which owns 415,995,323 CBC common shares, or 15.49 percent. CBC Employees Retirement Plan

is also a China Bank stockholder with 53,278,951 CBC common shares, or 2.12 percent. It is the bank’s No. 4 stockholder.

Joaquin T. Dee &/ or family hold 45,705,005 CBC common shares, or 1.70 percent, which is at No. 7, followed by Syntrix Holdings Inc. at No. 9 with 31,458,583 CBC common shares, or 0.80 percent. Hydee Management & Holdings Corp. is at No. 11 with 14,334,603 CBC common shares, or 0.53 percent.

Why don’t these two listed stocks give their public stockholders a seat or two in the board? Just asking.