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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

71%

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

Xavier P. Loinaz

Lead Independent Director

Expertise/Background

Economics, Finance, Risk Management, Business, Contracts, Commercial, and International Law, including engagements in social and environmental activities.

Board of Directors as of 30 June 2020

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

Jaime Augusto Zobel de Ayala

Executive Director

M613360

Fernando Zobel de Ayala

Executive Director

M602661

Delfin Lazaro

Non-Executive Director

M741330

Keiichi Matsunaga

Non-Executive Director

M55300

Xavier P. Loinaz

Lead Independent Director

M761110

Antonio Jose Periquet

Independent Director

M591015

Rizalina G. Mantaring

Independent Director

F60112

Board Attendance for the Year Ended 31 December 2019

(Board, Committee and Stockholders’ Meetings)
?

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 2019 and during the incumbency of the director

NED & IDEC

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

FCCGNCACRMRPTCPCC
No. of Meetings171 84472

Jaime Augusto Zobel de Ayala

Executive Director

C
1/1
C
7/7
-CM
8/8
----

Fernando Zobel de Ayala

Executive Director

-
1/1
VC
7/7
-MM
7/8
----

Delfin Lazaro

Non-Executive Director

-
1/1
M
7/7
M
1/1
-M
8/8
---M
2/2

Xavier P. Loinaz

Lead Independent Director

-
1/1
M
7/7
M
1/1
--C
4/4
M
4/4
--

Ramon R. Del Rosario, Jr.

Mr. Ramon R. Del Rosario, Jr. has been replaced by Ms. Rizalina G. Mantaring in the last Annual Stockholders’ Meeting

Independent Director

-
1/1
M
7/7
M
1/1
--C
4/4
M
4/4
M
6/7
C
2/2

Antonio Jose Periquet

Independent Director

-
1/1
M
7/7
M
1/1
-M
8/8
M
4/4
-C
7/7
-

Keiichi Matsunaga

Director

-
1/1
M
6/7
M
1/1
M--M
4/4
M
6/7
M
2/2

Individual Director Compensation (for 2019)

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 fix 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 2019, the following NEDs and IDs received gross remuneration as follows:

Non-Executive and Independent DirectorsRetainer FeeMeetings’ Attendance FeesGross Remuneration

Ramon R. Del Rosario, Jr.

P3,000,000P3,100,000P6,100,000

Delfin Lazaro

P3,000,000P2,500,000P5,500,000

Xavier P. Loinaz

P3,000,000P2,300,000P5,300,000

Keiichi Matsunaga

P3,000,000P2,500,000P5,500,000

Antonio Jose U. Periquet

P3,000,000P3,400,000P6,400,000

TOTAL

P15,000,000P13,800,000P28,800,000
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 CEO and COO, Jaime Augusto Zobel de Ayala and Fernando Zobel de Ayala, respectively, as executive directors, do not receive remuneration for attending Board meetings nor the fix retainer fee for Board of Directors.

Executive Compensation

Ayala provides market-competitive executive compensation and benefits, which are aligned to corporate goals, annual targets, and long-term strategic plans. It also adopts a performance-based variable compensation scheme using the Key Result Area scorecard accomplishments as metrics.

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 2019. 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 5-day trading from April 17 to 25, 2019.

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 2018P303.98MP243.29MP 0
Actual 2019P334.69MP280.07MP21.7M
Projected 2020P358.12MPM305.36P 0

All other officers as a group unnamed

Actual 2018P464.87MP243.29MP 0
Actual 2019P827.10MP535.42MP59.6M
Projected 2020P749.00MP749.00MP 0

Ownership and Control

Capital Structure

Number of shares outstanding as of 20 May 2020

Type of ShareNumber of SharesNumber of Votes per Share
Common Shares627,375,842One (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 29 February 2020

Title of Class Voting SharesName of Record OwnerNo. of Shares HeldPercent of Outstanding Voting Shares
Common Mermac, Inc296,625,706 35.9241%
Voting Preferred 172,778,760 20.9251%
Common PCD Nominee Corporation (Non-Filipino)162,032,358 19.6236%
Common PCD Nominee Corporation (Non-Filipino)107,795,772 13.0551%
Common Mitsubishi Corporation37,771,8964.5745%
Voting Preferred 19,545,6782.3672%

Top 20 Shareholders as of 29 February 2020

Stockholder NameNo. of Common SharesPercentage of Common Shares
1

Mermac, Inc.

296,625,70647.4069%
2

PCD Nominee Corporation (Non-Filipino)

162,032,35825.8961%
3

PCD Nominee Corporation (Filipino)

107,795,77217.2280%
4

Mitsubishi Corporation

37,771,896 6.0367%
5

Shoemart, Inc.

7,529,2031.2033%
6

Sysmart Corporation

1,500,9120.2399%
7

SM Investment Corporation

1,418,6100.2267%
8

Philippine Remnants Co., Inc.

823,0460.1315%
9

ESOWN Administrator 2019

515,9040.0825%
10

ESOWN Administrator 2018

486,5720.0778%
11

ESOWN Administrator 2016

481,7260.0770%
12

ESOWN Administrator 2017

441,4260.0705%
13

ESOWN Administrator 2015

431,6190.0690%
14

Mitsubishi Logistics Corporation

360,5120.0576%
15

ESOWN Administrator 2012

315,9630.0505%
16

ESOWN Administrator 2014

291,3450.0466%
17

Telengtan Brothers & Sons, Inc.

136,8570.0219%
18

Lucio Tan

127,9960.0205%
19

Xavier P. Loinaz

126,0520.0201%
20

Era Management & Development Corp.

106,1180.0170%

Directors and Executives Security Ownership as of 29 February 2020

Non-Executive and Independent DirectorsRetainer FeeMeetings’ Attendance FeesGross Remuneration

Ramon R. Del Rosario, Jr.

P3,000,000P3,100,000P6,100,000

Delfin L. Lazaro

P3,000,000P2,500,000P5,500,000

Xavier P. Loinaz

P3,000,000P2,300,000P5,300,000

Keiichi Matsunaga

P3,000,000P2,500,000P5,500,000

Antonio Jose U. Periquet

P3,000,000P3,400,000P6,400,000

TOTAL

P15,000,000

P13,800,000

P28,800,000

Shareholders' Rights

Beginning 2019, Ayala has also put in place an Electronic Voting in Absentia & Shareholder System, an online system which may be accessed by stockholders to register and vote remotely or in absentia on matters for resolution in the annual stockholders’ meeting. A stockholder who votes through the System shall be deemed present for purposes of quorum.

Accountability and Audit

External Audit

External Auditor Fees Sycip, Gorres, Velayo and Company (SGV &Co.)Amount in millions of pesos
20192018

Audit and Audit-Related Fees

P13.05P10.92

Non-Audit Fees

.12.12

Grand Total

13.17P11.04

In accordance with regulations issued by the Securities and Exchange Commission, the audit partner principally handling the company’s account is rotated every five years.

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 2019, the audit team has an average of 13.4 years audit experience and an average of 4.3 years tenure in the Ayala group.