On its 100th birthday, Chinabank gives away P132-M in shares to employees

Chinabank [CHIB 24.50 0.82%] distributed 5,388,400 shares to 8,321 employees as a way of celebrating its 100th anniversary, which actually happened in 2020.

The shares were fully gifted to each employee based on the number of years of service; 100 shares for each year worked at CHIB, provided the employee worked at least one full year before the announcement in August of last year. The 5.4 million shares represent about 0.2% of CHIB’s outstanding shares.

At yesterday’s closing price of P24.50/share, employees received about P2.450 per year of service. With P132 million worth of stock distributed to 8,321 employees, each employee received an average of P15,865 from the Centennial Stock Grant Plan.

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That’s not a bad way to celebrate!

One of the funny side-effects of the Centennial Grant was that it applied to officers and directors, too, so CHIB had to spam the PSE’s EDGE disclosure server just after the market close yesterday with 36 consecutive disclosures for the amount of stocks received for each officer and director. Props to CHIB’s investor relations and compliance team for providing all the info in the first page of the disclosure, and not just making each disclosure a clunky scan of a physical document.

Doing a quick scan of the disclosures, I saw CHIB’s Vice Chairman and Executive Director, Gilbert Dee, received 5,100 shares and I initially assumed that directors and officers were granted extra shares above/beyond the “100 per year of service” equation used for the staff grants. Then I realized that Mr. Dee has been with CHIB for 51 years, and I was impressed, humbled, and disappointed in myself for jumping to that conclusion. Sure, for some the small amounts will be more trouble than they’re worth right now, but for others who have been with the bank for a few years, this will end up being a pretty significant bonus.

One thing to watch out for is that Centennial Grant recipients are not permitted to sell the shares for two years, and that lock-up expires in August of 2022. Considering that CHIB’s volume average is somewhere in the neighborhood of 50,000 shares per day, that could be a significant amount of selling pressure if people wanted to liquidate positions quickly. Still, good on you, CHIB!

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