PLDT execs to get P3.6B under perks plan
By Emeterio Sd. Perez
Section Editor
THE top executives of Philippine Long Distance and Telephone Co. (PLDT) and its subsidiaries, led by PLDT chairman Manuel V. Pangilinan, have been blessed with big compensation and generous executive option plan under which they are entitled to buy shares at a big discount.
However, this is not all. They are in for something more, to the tune of P3.6 billion. This amount represents perks under the company’s present long-term incentive plan (LTIP) covering the period from January 1, 2004 to December 31, 2007.
And at the same time, they can also look forward to PLDT’s new three-year LTIP, which PLDT’s board approved on Monday.
Certain questions remain, however. For instance, who among them would share in the P3.6-billion LTIP package? Have PLDT executives met the criteria to deserve the reward?
As far as PLDT filings are concerned, with six months and a year more to go, company executives have enough time to work harder to meet the objectives in the three-year LTIP period, defined by the board as “the performance cycle.”
PLDT, the Philippines’ oldest and largest telecommunication company, said deserving executives would get the cash incentives based on a set of performance criteria defined by the company’s executive compensation committee.
“If the share price and profit objectives are met, the cost of the LTIP, before taxation, for the four-year Performance Cycle will be approximately P3.6 billion,” PLDT said in a disclosure submitted to the Securities and Exchange Commission and to the Philippine Stock Exchange.
PLDT did not explain in the filing how its board arrived at the figure when it has yet to complete the performance cycle.
The company only said the amount “will represent less than three percent of the cumulative consolidated net profit for the performance cycle.”
Fat compensations
PLDT is more likely than not to meet its target P3.6-billion LTIP perks, which would translate to about P4.612 percent of its cumulative net earnings from 2004 to the first six months of 2006.
The filings showed that PLDT’s cumulative net profits in the last two years and in the first two quarters of the year amounted to P78.077 billion.
PLDT’s existing LTIP had a good start in 2004 following the year when it finally returned to profitability, after accumulating losses of close to P40 billion in 2003.
In 2004, PLDT’s net income surged to P27.959 billion from P1.461 billion in 2003 and to P34.479 billion in 2005.
In the first six months of 2006, PLDT reported a net income of P15.639 billion.
Compensation benefits in the last two years amounted to P13.913 billion in 2005, equivalent to 40.352 percent of net income and P12.0256 billion in 2004, representing 43.009 percent of the year’s net income.
Business Mirror
August 30, 2006
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