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Governance Policies

Integrity is one of Ayala's core values. Strictly abiding by the principle of "doing the right thing" has earned for the company its strong position of trust among its stakeholders. Ayala believes that integrity starts with the individual; thus, we strive to maintain an exceptional standard of conduct among our employees.

This Code of Conduct and Ethics applies to all Ayala employees, including senior executives and members of the Executive and Management Committees. It provides an outline of the general expectations and sets standards by which employees are expected to conduct themselves.

For more information on the Code of Conduct and Ethics, click here

Ayala Corporation recognizes the fiduciary responsibility of its board of directors to ensure the integrity of the Corporation’s related party transactions (RPTs) for the protection of all shareholders’ interest. To aid in the performance of this duty, an RPT policy was adopted to:

  • Define related party relationships and transactions;
  • Provide guidance in the review, approval and disclosure of RPTs to ensure that they are at arm’s length, and the terms are fair, and will inure to the best interest of the Corporation and all its shareholders; and
  • Promote the objectives of the Securities and Exchange Commission (SEC) Rules on Material Related Party Transactions for Publicly-Listed Companies.

RPTs shall be disclosed, reviewed and approved in accordance with the Policy consistent with the principles of transparency and fairness. The Risk Management and Related Party Transactions Committee is tasked with overseeing the Policy’s implementation.

To view the Related Party Transactions Policy, click here

In pursuit of integrity, Ayala strives to enhance the level of transparency within the company through the establishment of the Whistleblower Policy to encourage directors, officers, employees and all suppliers, business partners, contractors and subcontractors, and other third parties to report any perceived wrongdoing or malpractice involving the company or its personnel. The policy is meant to encourage the reporting of such matters in good faith, with utmost confidence that the whistleblower will be treated fairly and protected from reprisal, harassment, disciplinary action, or victimization for whistleblowing.

For more details on the Whistleblowing Policy, click here

Ayala Corporation shall ensure that adequate time and attention in given to the fulfillment of the Directors of their duties. The Independent Directors and Non-executive Directors shall hold no more than five board seats in publicly-listed companies and Executive Directors shall hold no more that two board seats in listed companies outside the Corporation's group. The limits may be waived by the Board provided the interests of stockholders and stakeholders are not prejudiced.

Ayala Corporation is committed to having our Board comprised of qualified and dedicated Directors with a diverse mix of expertise, experience, skills and backgrounds. Diversity includes business experience, age, gender and ethnicity. Nominees shall be selected based on merit. With respect to gender, the Board shall be composed of at least 30% female directors, or at least two (2) female directors, whichever is lower, by 2025.

An Independent Director, after serving for nine (9) years, shall be perpetually barred from being elected as such in the Corporation, without prejudice to being elected as a non-Independent Director in the Corporation or as an Independent Director in other companies of the business conglomerate, where applicable, under the same conditions provided for in the rules and regulations of the SEC. In case the Corporation wants to retain an Independent Director who has already served for nine (9) years, the Board should provide meritorious justifications and seek shareholders’ approval during the annual shareholders’ meeting.

Meet the Board

Ayala’s Board at a Glance

7

Directors

1 year

Director Term of Office

86%

Percentage of non-executive and independent directors

0

Independent directors owning more than 2% of outstanding capital stock

Jaime Augusto Zobel de Ayala

Chairman

Fernando Zobel de Ayala

Vice-Chairman/President/CEO

Antonio Jose U. Periquet

Lead Independent Director

Expertise/Background

Industry Experience, Executive Leadership. Legal/Regulatory, Risk Management, International Business, Finance, Economics, Engineering, Investment Banking, Corporate and Investment Strategy Corporate Governance, Environmental and Social Initiatives

Board of Directors as of 30 June 2021

NameType of DirectorshipGenderAgeTenureOther Board Directorships with the Group (PLCs)Other Board Directorships outside of the Group (PLCs)

Jaime Augusto Zobel de Ayala,
Chairman

Non-Executive Director

M623450

Fernando Zobel de Ayala
Vice-Chairman

Executive Director

M612761

Delfin Lazaro

Non-Executive Director

M751421

Keiichi Matsunaga

Non-Executive Director

M56400

Cezar P. Consing

Non-Executive Director

M61>121

Antonio Jose Periquet

Lead Independent Director

M501115

Rizalina G. Mantaring

Lead Independent Director

F61>213

Board Attendance for the Year as of 31 December 2021

BOARD AND BOARD COMMITTEE MEMBERSHIPSTOCKHOLDERS, BOARD, BOARD COMMITTEE MEETINGS AND DIRECTORS’ ATTENDANCEFOR THE YEAR ENDED DECEMBER 31, 2020
?

AS

Annual Stockholder

AC

Audit Committee

BOD

Board of Directors

C

Chairman

CGNC

Corporate Governance and Nomination Committee

EC

Executive Committee

FC

Finance Committee

ID

Independent Director

PCC

Personnel and Compensation Committee

RMRPTC

Risk Management and Related Party Transactions Committee

VC

Vice Chairman

DetailsMembership and Attendance
Stockholder & BoardBoard Committee
MeetingASBOD

In 2020 and during the incumbency of the director

NED & IDEC

The actions of the Executive Committee were taken via digital/electronic means

FC

Mr. Consing was elected as member of the Finance Committee on December 3, 2020

CGNC

Mr. Del Rosario was Chairman until April 24, 2020; Ms. Mantaring was elected member of the Committee and Chairman on April 24, 2020; and Mr. Matsunaga was elected member and Mr. Periquet was elected Chairman on December 3, 2020

AC

Mr. Del Rosario was member until April 24, 2020; Mr. Loinaz was Chairman until December 3, 2020; Ms. Mantaring was elected as member on April 24, 2020 and Chairman on December 3, 2020; and Mr. Periquet was elected as member on December 3, 2020

RMRPTC

Mr. del Rosario was member until April 24, 2020; Ms. Mantaring was elected as member on April 24, 2020

PCC

Ms. Mantaring replaced Mr. del Rosario as member and Chairman on April 24, 2020

No. of Meetings161 116422

Jaime Augusto Zobel de Ayala

Executive Director

C
1/1
C
6/6
-CM
11/11
----

Fernando Zobel de Ayala

Executive Director

-
1/1
VC
6/6
-MM
11/11
----

Delfin Lazaro

Non-Executive Director

-
1/1
M
6/6
M
1/1
-C
11/11
---M
2/2

Keiichi Matsunaga

Director

-
1/1
M
6/6
M
1/1
M-MM
4/4
M
2/2
M
2/2

Cezar P. Consing

Mr. Consing replaced Mr. Loinaz as member of the Board on December 3, 2020

-
1/1
M
1/1
M

Xavier P. Loinaz

Mr. Consing replaced Mr. Loinaz as member of the Board on December 3, 2020

Lead Independent Director

-
1/1
M
4/5
--M
4/5
C
3/4
--

Antonio Jose Periquet

Independent Director

-
1/1
M
6/6
M
1/1
-M
11/11
C
6/6
M
C
2/2
-

Rizalina G. Mantaring

Ms. Mantaring replaced Mr. Del Rosario as member of the Board on April 24, 2020

Independent Director

-
1/1
M
4/4
M
1/1
--M
3/3
C
3/3
M
1/1
C

Ramon R. Del Rosario, Jr.

Ms. Mantaring replaced Mr. Del Rosario as member of the Board on April 24, 2020

Independent Director

-
1/1
M
2/2
C
3/3
M
1/1
M
1/1
C
2/2

Individual Director Compensation (for 2020)

The Personnel and Compensation Committee recommends to the Board remuneration packages for directors, ensuring that compensation is consistent with the company’s culture, strategy, and control environment, and aligned with the long-term interests of the company and its stakeholders. Total remuneration or changes thereto are approved by the stockholders during the annual stockholders’ meeting.

Non-Executive and Independent Directors Remuneration

Only NEDs and IDs receive director fees. The existing remuneration framework for the NEDs and IDs adopted by the company consists of a fixed retainer fee and meeting fees. Fee structure is as follows:

Fee StructureRetainer FeeFor BoardFor All Committees
Committee Chairman and MemberP3 million per annumP0.2 million per meeting attendedP0.1 million per meeting attended

In 2020, the following NEDs and IDs received gross remuneration as follows:

Non-Executive and Independent DirectorsRetainer FeeMeetings’ Attendance FeesGross Remuneration

Ramon R. Del Rosario, Jr.

-P1,100,000P1,100,000

Delfin Lazaro

P3,000,000P2,600,000P5,600,000

Xavier P. Loinaz

P3,000,000P1,500,000P4,500,000

Keiichi Matsunaga

P3,000,000P2,100,000P5,100,000

Rizalina G. Mantaring*

P3,000,000P1,600,000P4,600,000

Antonio Jose U. Periquet

P3,000,000P3,200,000P6,200,000

TOTAL

P15,000,000P12,100,000P27,100,000
* Ms. Mantaring was elected a member of the Board on April 24, 2020, replacing Mr. Del Rosario.None of the NEDs and IDs receive compensation from Ayala for services other than those provided as a director. They are not entitled to stock options and performance bonuses from the company.

Executive Directors Remuneration

Ayala’s executive directors do not receive remuneration for attending Board meetings nor the fixed retainer fee for Board of Directors.

Executive Compensation

In addition, Ayala provides a long-term incentive program for senior executives and key talents. From the three percent of the company’s authorized capital stock allocated by the stockholders, the Board approved the grant under the stock ownership program to eligible executives in April 2020. The basis for the grant is consistent outstanding performance record over a period of three years. The grant price is based on the rounded-off volume weighted average prices of the stock at the Philippine Stock Exchange over the last five-day trading from March 13 to 23, 2020.

Name and Principal Position

Jaime Augusto Zobel de Ayala

Chairman and CEO

Fernando Zobel de Ayala

President and Chief Operating Officer

Solomon M. Hermosura

Managing Director, Chief Legal Officer, Corporate Secretary, Chief Compliance Officer, Data Protection Officer, and Corporate Governance Group Head

Jose Teodoro K. Limcaoco

Senior Managing Director, Chief Finance Officer, Chief Risk Officer, Chief Sustainability Officer, and Finance Group Head

John Philip S. Orbeta

Managing Director, Chief Human Resources Officer, and Corporate Resources Group Head

YearSalaryBonusOther Annual Compensation

CEO and Most Highly Compensated Executive Officers

Actual 2019P334.69MP280.07MP21.7M
Actual 2020P348.13MP270.81MP 0
Projected 2021P355.89MP108.75MP 0

All other **officers as a group unnamed

Actual 2019P827.10MP535.42MP59.6M
Actual 2020P686.11MP436.25MP 0
Projected 2021P710.25MP224.53MP 0
** Managers and up (including all above-named officers).

Ownership and Control

Capital Structure

Number of shares outstanding as of May 31, 2021

Type of ShareNumber of SharesNumber of Votes per Share
Common Shares628,145,649One (1) vote per share
Voting Preferred Shares200,000,000
Preferred B Series 1 Shares20,000,000

One (1) vote per share on matters where holders of non-voting shares are entitled to vote under Section 6 of the Revised Corporation Code of the Philippines

Preferred B Series 2 Shares30,000,000

Ownership Structure

Security Ownership of More than 5% Record Owners As of 28 February 2021

Title of Class Voting SharesName of Record OwnerNo. of Shares HeldPercent of Outstanding Voting Shares
Common Mermac, Inc296,625,70656.7314%
Voting Preferred 172,778,760
Common PCD Nominee Corporation (Non-Filipino)149,451,442 18.0624%
Common PCD Nominee Corporation (Non-Filipino)120,554,972 14.5701%
Common Mitsubishi Corporation37,771,8966.9273%
Voting Preferred 19,545,678

Top 20 Shareholders as of February 28, 2021

Stockholder NameNo. of Common SharesPercentage of Common Shares
1

Mermac, Inc.

296,625,70647.2774%
2

PCD Nominee Corporation (Non-Filipino)

149,451,44223.8202%
3

PCD Nominee Corporation (Filipino)

120,554,97219.2145%
4

Mitsubishi Corporation

37,771,896 6.0202%
5

Shoemart, Inc.

7,529,2031.2000%
6

Sysmart Corporation

1,500,9120.2392%
7

ESOWN Administrator 2020

1,455,4300.2320%
8

SM Investment Corporation

1,418,6100.2261%
9

Philippine Remnants Co., Inc.

823,0460.1312%
10

ESOWN Administrator 2019

512,9620.0818%
11

ESOWN Administrator 2018

482,4140.0769%
12

ESOWN Administrator 2016

471,0610.0751%
13

ESOWN Administrator 2017

430.2320.0001%
14

ESOWN Administrator 2015

397,2890.0633%
15

Mitsubishi Logistics Corporation

360,5120.0575%
16

ESOWN Administrator 2012

315,9630.0504%
17

ESOWN Administrator 2014

284,9600.0454%
18

Telengtan Brothers & Sons, Inc.

136,8570.0218%
19

Lucio Tan

127,9960.0204%
20

Era Management & Development Corp.

106,1180.0575%

Directors and Executives Security Ownership as of February 18, 2021

Title of class of outstanding sharesName of beneficial ownerAmount and nature of beneficial ownershipCitizenshipPercent of total outstanding shares
Directors
CommonJaime Augusto Zobel de Ayala633,722 (indirect)Filipino0.0722%
Preferred B Series 120,000 (indirect)0.0023%
Voting Preferred543,802 (direct)0.0620%
CommonFernando Zobel de Ayala616,376 (direct & indirect)Filipino0.0702%
Voting Preferred554,983 (direct)0.0633%
CommonDelfin L. Lazaro82,554 (direct & indirect)Filipino0.0094%
Voting Preferred258,297 (direct)0.0294%
CommonCezar P. Consing204,380 (direct & indirect)Filipino0.0233%
CommonKeiichi Matsunaga1Japanese0.0000%
CommonAntonio Jose U. Periquet1,200 (direct)Filipino0.0001%
CommonRizalina G. Mantaring57,870 (direct & indirect)Filipino0.0066%
Voting Preferred3,604 (direct)0.0004%
CEO and most highly compensated officers
CommonJaime Augusto Zobel de Ayala633,722 (direct & indirect)Filipino0.0722%
Preferred B Series 120,000 (indirect)0.0023%
Voting Preferred543,802 (direct)0.0620%
CommonFernando Zobel de Ayala616,376 (direct & indirect)Filipino0.0702%
Voting Preferred554,983 (direct)0.0633%
CommonSolomon M. Hermosura178,268 (indirect)Filipino0.0203%
Voting Preferred53,583 (direct)0.0061%
CommonJose Teodoro K. Limcaoco404,889 (indirect)Filipino0.0461%
CommonJohn Philip S. Orbeta741,723 (indirect)Filipino0.0845%
Other executive officers (Ayala group ManCom members/Senior Leadership Team)
CommonCezar P. Consing204,380 (indirect)Filipino0.0233%
CommonBernard Vincent O. Dy49,439 (indirect)Filipino0.0056%
CommonArthur R. Tan419,182 (indirect)Filipino0.0478%
CommonJose Rene Gregory D. Almendras259,106 (direct & indirect)Filipino0.0295%
CommonAlfredo I. Ayala292,586 (direct & indirect)Filipino0.0333%
CommonPaolo Maximo F. Borromeo102,027 (indirect)Filipino0.0116%
CommonJohn Eric T. Francia121,083 (indirect)Filipino0.0138%
CommonErnest Lawrence L. Cu227,628 (indirect)Filipino0.0259%
CommonRuel T. Maranan35,094 (indirect)Filipino0.0040%
CommonEstelito C. Biacora10,657 (indirect)Filipino0.0012%
CommonJosephine G. De Asis38,544 (indirect)Filipino0.0044%
CommonCatherine H. Ang35,345 (indirect)Filipino0.0040%
Preferred B Series 22,000 (indirect)0.0002%
Voting Preferred 5,290 (direct)0.0006%
CommonDodjie D. Lagazo0Filipino0.0000%
CommonJoanne M. Lim0Filipino0.0000%
All Directors and Officers as a group5,953,2330.6785%

No director or member of the Company’s management owns 2.0% or more of the outstanding capital stock of the Company.

Shareholders' Rights

Accountability and Audit

External Audit

External Auditor Fees Sycip, Gorres, Velayo and Company (SGV &Co.)Amount in millions of pesos
20202019

Audit and Audit-Related Fees

₱11.77P13.05

Non-Audit Fees

2.25.12

Grand Total

14.0213.17

The external auditor and key engagement partners are rotated or changed in accordance with the requirements prescribed by applicable laws and regulations such as the rotation period.

Internal Audit

Ayala Corporation’s Internal Audit supports the Audit Committee in the effective discharge of its oversight role and responsibility and its activities are governed by a separate Internal Audit Charter approved by the Audit Committee and the Board. Internal Audit adopts a risk-based audit approach in developing its annual work plan, which is reassessed quarterly to consider emerging risks. As of 2020, the audit team has an average of 14.4 years audit experience and an average of 5.3 years tenure in the Ayala group.