Key Players

 

A. Shareholders

The Company upholds the rights of its shareholders, as well as the general investing public, to obtain relevant information about the Company in a timely and regular basis.

The Company's financial performance and prospects are regularly reported to the SEC and PSE. These reports are immediately made public upon submission to the SEC through press releases and postings in the Company’s website. These include disclosures on related party transactions in compliance with Company policy. No disputes in connection with such related party transactions were reported in the past two years.

Investors' briefings are held quarterly, where equity and credit analysts of both local and foreign-based institutions are invited. Analysts unable to attend in person participate through a teleconference facility with playback feature available up to three days after the event.

Members of Senior Management make themselves available for meetings with institutional investors through Company visits, teleconferences, briefings and attendance in local and international investor conferences. Press/media briefings are likewise held regularly to report on Meralco’s operating and financial results to the various representatives of media, particularly from the broadsheets and wire agencies. The briefings become venues for Management to answer questions and clarify issues prior to the release of information to the public.

Shareholders and investors are provided with adequate facility to communicate with the Company such as telephone, mail, electronic mail, and its website, www.meralco.com.ph. The Investor Relations Office supervises the investors’ briefings and attends to institutional investors’ needs; while the Stockholder Affairs Office attends to the inquiries and other concerns of shareholders, including the distribution of Notice and Agenda of the AGM at least 30 days before the said meeting. For the 2010 AGM, notices were sent on March 30, 2010, 56 days before the AGM on May 25, 2010.

The AGM serves as a venue for the shareholders to clarify Company issues in the presence of the Board, the Chairman, the CEO, Management and external auditors. Shareholders are encouraged to personally attend the AGM and if unable to do so, are advised of their right to appoint a proxy on their behalf. Notarization of a proxy is not required but has to comply with the requirements of law, in particular, the Corporation Code and SRC, pertinent rules and regulations, By-Laws, and rules and policies adopted by the Board.

The voting procedure in the AGM is as follows: (a) the matters in the agenda require the affirmative vote of qualified stockholders. Each common stockholder shall be entitled to one vote for each share; (b) in the election of directors, each qualified stockholder may accumulate and distribute his votes in accordance with the Corporation Code of the Philippines; (c) voting and counting of votes shall be by balloting, show of hands or viva voce. Auditors and inspectors appointed by the Board will be present to canvass and inspect ballots.

During the May 25, 2010 AGM, the shareholders ratified the dividend policy approved by the Board, which called for payment of regular dividends equivalent to 50% of core earnings, which may be supplemented by a special dividend determined on a 'look-back' basis. Any declaration and payment of a special dividend is dependent on the availability of unrestricted retained earnings and cash. Details of the cash dividend pay-outs are contained in the Notes to Consolidated Financial Statements.

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Meralco Ownership Structure

The Company ensures that it consistently complies with the required disclosure on shareholdings of its securities. It discloses the top 20 shareholders of its common shares annually. It also provides an annual disclosure of security ownership at certain record and beneficial owners who hold more than 5% of its equity shares. In compliance with the SEC requirements, a quarterly report of the Company’s top 100 shareholders is disclosed in its website.

Based on Meralco’s stock and transfer book, the security ownership as at December 31, 2010 of certain record and beneficial owners of more than 5% of any class of its voting securities is as follows:
 
Beacon Electric Asset Holdings, Inc. No. of Shares Percentage
Beacon Electric Asset Holdings, Inc. 392,502,961 34.8%
Government Service Insurance System 332,172,311 29.5%
PCD Nominee Corporation (Filipino) 74,974,453 6.7%
PLDT Communications and Energy Ventures, Inc. 68,800,000 6.1%
Social Security System 62,990,689 5.6%
Details are found in the "List of Top 100 Stockholders as at December 31, 2010" as disclosed to PSE on January 17, 2011.

The Company’s public ownership level as at December 31, 2010 as posted in the PSE website is at 22%. As of the said date, the outstanding shares of the Employee Stock Options Purchase Plan represents 1.29% of the total capital stock of the Company.
 

B. Employees

The Company is committed to the development and welfare of its employees. All personnel and staff are properly informed, trained and empowered to perform well, in the spirit of malasakit and teamwork/collegiality. They are engaged and compensated based on qualifications, merit and performance.

Their professional growth and career advancement are ensured through the development and implementation of competency-based training, skills enrichment opportunities, and performance evaluation and job promotion plans and programs. Adequate provisions for medical and health support, essential benefits, rewards and recognition, and workplace safety are constantly provided for their protection, well-being and motivation. Uprightness and impartiality are observed in the resolution of conflicts. Management promotes openness and encourages employees to give suggestions and comments on corporate, administrative and operational improvements.
 

C. Subsidiaries

The contribution of Meralco’s subsidiaries has always been significant in boosting shareholder value. The Subsidiary Management Policy continues to be the standard set of rules for creating and managing subsidiaries based on the criteria and principles embodied in the Company’s Manual of Corporate Governance, Code of Ethics, and existing laws, rules and regulations. In 2010, the Company introduced policy changes to strengthen good governance practice of subsidiaries. Specifically, a transparent process for the nomination and selection of Board members in subsidiaries was defined, ensuring that the criteria for Board directorship are followed including qualifications, composition and conflict of interest situations. The Company also encourages its subsidiaries to adopt their own Manual of Corporate Governance and Code of Ethics.
 

D. Other Stakeholders

Meralco seriously considers the impact of business decisions on the interests of its shareholders and other stakeholders. The Declaration of Corporate Principle of the Company’s Revised Manual of Corporate Governance specifically mentions: "The Company…uphold(s) an ethical culture that will protect and promote the best interest of the Company for the common benefit of the Company’s stockholders and other stakeholders." The Company also protects and maintains good relations with its suppliers and creditors based on mutual respect and benefit. The Company strives to foster long-term stability, direct and open relation, and continuous development with suppliers to attain quality, competitiveness, process efficiency and performance reliability; foster governance principles in all of its business dealings with them; and seek, encourage and prefer.

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