Rights of Shareholders

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.

 

Voting Right

All stockholders have the right to vote on the election, removal and replacement of Directors and
vote on certain corporate acts in accordance with the Corporation Code.

Cumulative voting shall be used in the election of Directors. Directors may be removed with or
without cause, but Directors shall not be removed without cause if it will deny minority shareholders representation in the Board. Removal of Directors requires an affirmative vote of two-thirds (2/3) of the outstanding capital of the Corporation.

Any stockholder may nominate candidates for election to the Board of Directors by sending a nomination letter to the Nomination Committee within the relevant deadline as may be approved by the Board and disclosed pursuant to the rules of the Philippine Stock Exchange. All nominations will be reviewed and deliberated upon by the Nomination Committee prior to endorsing the qualified candidates for ratification and approval by the Board.

 

Pre-emptive Right

All stockholders have pre-emptive rights, unless there is a specific denial of this right in the Articles
of Incorporation or an amendment thereto. They shall have the right to subscribe to the capital
stock of the Corporation. The Articles of Incorporation may lay down the specific rights and powers
of shareholders with respect to the particular shares they hold, all of which are protected by law so
long as they are not in conflict with the Corporation Code.

 

Right of Inspection

Shareholders shall be allowed to inspect corporate books and records including minutes of Board
meeting and stock registries in accordance with the Corporation Code and shall be provided an
annual report, including financial statements, without cost or restrictions.

 

Right to Information

The Shareholders shall be provided, upon request, with periodic reports which disclose personal
and professional information about the Directors and officers and certain other matters such as
their holdings of the Corporation’s shares, dealings with the Corporation, relationships among
Directors and key officers, and the aggregate compensation of Directors and officers.

The Information Statement/Proxy Statement where these are stated must be distributed to the
shareholders before annual general meetings and in the Registration Statement and Prospectus in
case of registration of shares for public offering with the Commission.

The minority shareholders shall have the right to propose the holding of a meeting, and the right to
propose items in the agenda of the meeting, provided the items are for legitimate business
purposes.

In accordance with existing law and jurisprudence, minority shareholders shall have access to any
and all information relating to matters for which the Management is accountable for and to those
relating to matters for which the management should include such information and, if not included, then the minority shareholders can propose to include such matters in the agenda of stockholders’ meeting provided always that this right of access is conditioned upon the requesting shareholder’s having a legitimate purpose for such access.

The notice of the Annual and Special Shareholders’ Meeting with sufficient and relevant information shall be sent at least 28 days prior to the meeting.

 

Appraisal Right

In accordance with the Corporation Code, shareholders may exercise appraisal rights under the
following circumstances:

i. In case any amendment to the Articles of Incorporation has the effect of changing or restricting the rights of any stockholders or class of shares, or of authorizing preferences in any respect superior to those of outstanding shares of any class, or of extending or shortening the term of corporate existence;

ii. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or substantially all of the corporate property and assets as provided in the Corporation Code; and

iii. In case of merger or consolidation.

 

Alternative Dispute Mechanism for Intra-Corporate Dispute

The Corporation adopts the rules and procedures set forth under Republic Act No. 9285, otherwise
known as the Alternative Dispute Resolution Act of 2004, as an alternative means to settle disputes
with a view towards preventing excessive litigation.

 

Duty of Directors to uphold shareholders’ rights

It is the duty of the Directors to promote shareholders’ rights, remove impediments to the exercise of shareholders’ rights and recognize lawful mechanisms to seek redress for violation of their rights. They shall encourage the exercise of shareholders’ voting rights and the solution of collective action problems through appropriate mechanisms.

They shall be instrumental in removing excessive costs and other administrative or practical impediments to shareholders participating in meetings and/or voting in person. The Directors shall pave the way for the electronic filing and distribution of shareholder information necessary to make informed decisions subject to legal constraints.