DigiPlus President exercises option on over 21.7 million shares

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DigiPlus [PLUS 58.10, up 3.6%; 75% avgVol] [link] disclosed that its President, Tsui Kin Ming (TKM), exercised his employee stock option plan (ESOP) to purchase 21,758,202 PLUS shares for P2.68/share, for a total purchase price of P58.3 million. At the time of TKM’s purchase, the market price of PLUS’s shares was P54.85, making TKM’s stock purchase worth P1.2 billion at open market price levels.

MB bottom-line: This kind of ESOP payday is uncommon for companies on the PSE. American CEOs have been doing this for decades, but it’s not as accepted here for reasons that are sometimes hard to pin down. Does TKM deserve to buy P1.2 billion worth of stock for just P58 million? Does he deserve to reap over P1.1 billion in “free” value just for being the President of the company? What is the right compensation for a guy who will be in charge of the hottest company on the PSE? When the board of directors approved PLUS’s ESOP plan back in January 2023, PLUS was trading right around the strike price for the option. As a shareholder, I don’t know that I would credit PLUS’s 1977% rise over that time period solely to TKM, but I’m also willing to entertain the thought that PLUS’s success and stock price rise was not automatic, and that if a good amount of that rise was due to TKM’s work, then the gamble that he took in accepting the ESOP as part of his compensation was profitable for both TKM and the shareholders that approved the plan.

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