Right to Share in Profits or Dividends
Dividends declared by Ayala Land on its shares of stock are payable in cash or additional shares of stock. In 2016, Ayala Land distributed a total of P7.0 billion in cash dividends.
The payment of dividends in the future will depend upon the earnings, cash flow and financial condition of the Company. Special cash dividends are declared depending on the availability of cash, taking into account the Company’s capital expenditure and project requirements and progress of its on-going asset rationalization program. Cash dividends are subject to approval by the Board of Directors but no stockholder approval is required. Property dividends that may come in the form of additional shares of stock are subject to approval by both the Board of Directors and stockholders. In addition, payment of stock dividends is likewise subject to the approval of the Securities and Exchange Commission and the Philippine Stock Exchange.
The declaration of dividends depends on the earnings, cash flow and financial condition of the Company. To support the 2020-40 plan, Ayala Land will provide a fixed dividend per share, per year, which will translate to a 30 percent to 40 percent dividend payout ratio based on prior year’s earnings.
Right to Participate in Decisions Concerning Fundamental Corporate Changes
At Ayala Land, we respect the rights of Shareholders to participate in decisions concerning fundamental corporate changes, such as but not limited to, amendments to the Company’s constitution, authorization of additional shares, transfer of all or a substantial portion of the Company’s assets, approval of remuneration matters, nomination of candidates for the Board and election of Directors through voting.
Right to Participate Effectively and Vote in General Shareholder Meetings
Shareholders are given the opportunity to approve remuneration matters of the Company’s non-executive directors during general meetings, whether regular or special. Each shareholder may cast votes to which the number of shares he or she owns entitles him or her. The last increase in remuneration (annual retainer fee, board and committee meetings per diem) of non-executive directors was approved during the 2011 Annual Shareholders’ Meeting.
Minority shareholders maintain the right to nominate candidates for the Board of Directors. The list of the names of the nominees to the Board of Directors, together with the written consent of the nominees, shall be filed and submitted to the Nomination Committee through the Office of the Corporate Secretary, at least 30 business days prior to the date set for the annual meeting wherein they will be elected. The profile of directors seeking election or re-election is included in the Definitive Information Statement.
The election of Directors shall be by ballot. Each shareholder entitled to vote may cast the vote to which the number of share he or she owns entitles him or her individually or for as many persons as many votes as the number of Directors to be elected multiplied by the number of his or her shares shall equal, or he or she may distribute them on the same principle among as many candidates as he or she may see fit, provided that the whole number of votes cast by him or her shall not exceed the number of shares owned by him or her multiplied by the whole numbers of Directors to be elected.
Electronic Voting In 2016, Ayala Land provided for an electronic voting facility for all stockholders during the Annual Stockholders’ Meeting. This practice will be continued in the succeeding annual meetings. All voting and vote tabulation procedures are disclosed before the meeting proceeds.
The minutes of the most recent Annual Stockholders’ Meeting is posted on the company website. It documents the whole proceeding including the opportunity for shareholders to ask questions or raise issues. It also records the questions raised by stockholders in attendance and answers provided by each respective Board member. The minutes also document the resolutions, and the voting results, including approving, dissenting and abstaining votes for each agenda item, and the list of Board members who attended.
Markets for Corporate Control Functioning in an Efficient and Transparent Manner
In cases of mergers, acquisitions and/or takeovers requiring shareholders’ approval, the Board of Directors may appoint an independent party to evaluate the fairness of the transaction price whenever deemed necessary.
Facilitating the Exercise of Ownership Rights by All Shareholders
The Company conducts continuous dialogue with institutional investors and implements active measures to encourage the active participation of shareholders, including institutional investors at the Annual Stockholders’ Meeting, and through quarterly corporate briefings, one-on-one discussions, conference calls, and written platforms such as electronic mail. If the controlling shareholder is an institutional investor, the ownership share of other institutional investors are counted in determining if their ownership is greater than five percent.
Shareholder Value Creation
Ayala Land also seeks to consistently improve the business fundamentals and prospects in order to deliver increasing value to our shareholders’ investments in the Company over time. Our strategies, business models and operating plans are all oriented towards the achievement of consistent progress in our operating and financial results and, therefore, the underlying determinants of firm value. Specific targets relating to key metrics such as growth, profitability, return on equity, asset efficiency and total shareholder return are set and incorporated into the management team’s Key Result Areas on a corporate, divisional and individual basis. These are approved, measured and tracked by the Board, and form the basis of management promotions, allocation of a performance-based cash bonus, and ESOWN grants. This process ensures optimal alignment of incentives between shareholders and management.