Who are the most generous employers of them all?

P98 million to P2.1 million was the range of average executive pay the most valuable listed firms paid each of their top executives in 2017

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Check out the list of 25 most generous publicly listed companies compiled by Entrepreneur Philippines (www.entrepreneur.com.ph).

Here are my own insights:

Each of the top 5 Ayala Corporation executives was paid an average of P97.9 million in 2017. This includes salaries, bonuses and other compensations.

The Ayala business group, as this Entrepreneur Philippines research on the most valuable listed firms shows, is the most generous. It has a reputation of employing professionals to run its core businesses since only a few family members work for the conglomerate. BPI, Ayala Land and Globe are prominent in this list of 25 publicly listed firms that handsomely pay its top executives.

Interestingly, among the family-run conglomerates aside from the Ayalas, it is the Aboitizes, Gokongweis, Sys, and Andrew Tan’s — in that order — who also lavishly pay its professionals running core businesses, such as banking, power, real estate, and food units. Executives in their diversified holding firms are also well-paid.

These family-run businesses have been attracting more professionals into their fold to work hand-in-hand with family members.

Interestingly, the Sy family — who tops Forbes’ list of richest families in the Philippines, and whose patriarch Henry Sy is the richest from Asean in Forbes’ list of world billionaires — are not as prominent.

Sy-led SM Prime, the most valuable real estate and retail firm in the country, pays its executives an average of P26.2 million. That pales in comparison with Ayala Land’s P41.1 million. The Sy’s holding firm SM Investments, is another example: P21.6 million ‘only’ versus industry peers that even have lower capitalization. For instance, executive pay at Aboitiz Equity Ventures and JG Summit is at P32.5 million and P31.1 million, respectively. (Note to self: I wonder if executive pay at the Sy-run businesses increased in the past decade when the empire grew exponentially, and when headhunters rushed to fill SM group’s increasing need for professionals.)

Other rich families in the Philippines whose business units are also in the list — though not as generous — include Manuel Villar (Golden Bria, not Vista Land), Lucio Tan (holding firm LT Group), the Consunjis (DMCI), and the Razons (ICTSI and casino operator Solaire).

Meantime, professionally-run conglomerates led by Ramon Ang and Manuel Pangilinan (or MVP) are also not frugal when it comes to executive pay. San Miguel top executives are paid an average of P95.9 million, second highest next to Ayala Corp.

Here are how executive pay compare in specific industries:

  • In telco: Globe are paid more than PLDT executives; P40.8 million vs P33.4 million, respectively.
  • In banking: BPI and Metrobank pay their executives more than the largest bank BDO. P45.2 million, P43.9 million, P36.9 million respectively.
    • Of the “other” banks, surprised to see Security Bank in the list, paying P17.5 million.
  • In power: The top two are VERY generous. Meralco, the power distributor with an eroding monopoly, pays P45.6 million. Aboitiz Power, which only aggressively grew the past two decades, is only a few notches away with P38 million.
  • In real estate: Here are the ranking: Ayala Land (P41.1 million), SM Prime (P26.2 million), Megaworld (P23.6 million), Golden Bria (P2.8 million).
  • In food: Jollibee Foods Corporation, P35.1 million, and Universal Robina Corporation (of the Gokongwei group), P23.1 million.
  • In diversified holding firms: Ranked from the top sources of executive pay are:
    • Ayala Corporation (Zobel de Ayala family), P97.9 million
    • San Miguel Corporation, P95.9 million
    • Metro Pacific Investments Corporation (MPIC), P43 million
    • Aboitiz Equity Ventures (Aboitiz family), P32.5 million
    • JG Summit Holdings (Gokongwei family), P31.1 million
    • SM Investments (Sy family), P21.6 million
    • GT Capital Holdings (George Ty family), P11 million
    • LT Group (Lucio Tan family), P2.6 million
    • DMCI Holdings (Consunji family), P2.1 million

These may seem like obscene amounts to many in the Philippines where a chunk of the population is still stuck in economic squalor. But I take it (executive pay) as an indicator of many progressive aspects of the economy.

It is, for example, an opportunity for those who were not born to elite families but have earned valuable degrees from top schools, or have excelled in a field, to also prosper in life. Brain and brawn, rather than just blood or family name, have increasingly been ingredients to a better chance at life right here in their home country. In the past, this economic opportunity was mostly chased abroad.

As well, executive pay is an indicator of how robust the Philippine economy has become. Business groups have expanded in breadth and depth. For some groups, family members are not enough to fill the increasing number of gaps and roles.

I am, however, interested to read future reports on how executive pay has progressed or regressed through the years. Which groups or specific companies have upped their game in attracting professionals to choose them? Does executive pay have a direct correlation to stock price? Are executives in highly competitive, and/or the disrupted, industries paid more than others? Does age matter?

 

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