Key Players

The following are the key players in ensuring the application of good governance practices and policies within Meralco:

A. Shareholders

Meralco recognizes its responsibility to protect its shareholders’ rights by creating value and ensuring sustainable growth in business. Meralco upholds their rights to obtain relevant information about Meralco in a timely and regular basis.

Meralco’s financial performance and prospects are regularly reported to the SEC and PSE. These reports are immediately made public through press releases and postings in the Meralco’s website.

Investors’ briefings are held quarterly, where equity and credit analysts of both local and foreign-based institutions are invited. Analysts who are 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 television, print and wire agencies. Such briefings are 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 facilities to communicate with Meralco through telephone, mail, electronic mail, and website, The Investor Relations Office supervises the investors’ briefings and attends to institutional investors’ needs. Stockholder Affairs Office attends to the inquiries and other concerns of shareholders, including the distribution of Notice and Agenda of the Annual General Meeting, or AGM, at least 30 days before the said meeting. Notices were sent on April 16, 2014, 28 working days before the 2014 AGM on May 27, 2014.

Meralco also adheres to its commitment to maintain a fair and competitive return to its investors. Meralco has a dividend policy approved by the Board which was ratified by the shareholders in 2010. The policy provides 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 special dividend shall be dependent on the availability of unrestricted retained earnings and availability of free cash. The details of the cash dividend pay-outs are included in Notes to the Audited Consolidated Financial Statements, found on the Section on Equity.

Annual General Meeting

The Notice of AGM for 2014 together with other supporting information and documents, all written in the English language, were sent by the Office of the Corporate Secretary to all stockholders on record as of March 14, 2014 last April 16, 2014, 28 working days ahead of the AGM date. The meeting invitation indicated the following: a) date, time and place of the meeting; b) profiles of the elected directors such as age, qualifications, experiences, positions or directorships in other companies, for re-electionists – date of first appointment; c) name and profile of the auditing firm recommended for appointment; d) issues to be voted with the Board’s opinions and supporting documents that will provide sufficient information for the shareholders to base their decisions on, and; e) brief description of the dividend policy and amount of final dividends declared.

Shareholders are encouraged to personally attend the AGM and if unable to do so, are advised of their right to appoint a proxy in their behalf. A copy of the proxy form was sent together with the AGM call to meeting. Notarization of a proxy is not required but has to comply with legal requirements. All of these AGM related documents were also made available to the shareholders through the Company's website last April 16, 2014, 28 working days in advance of the AGM. All information are provided ahead of the AGM schedule to provide adequate time for the stockholders to review the agenda.

In 2014, the AGM was held last May 27, 2014 at the Meralco Theater, Lopez Building, Ortigas Avenue, Pasig City, which is very accessible to shareholders who wished to attend the Meeting. Before the meeting commenced, the Corporate Secretary explained the ground and voting rules to be observed during the meeting to ensure the conduct of fair, orderly, and efficient proceedings and protect the rights of the shareholders. The voting rules and procedures were included in the Notice of AGM sent to all the shareholders ahead of the scheduled AGM and also published in the Company website.

The 2014 AGM was presided by the Chairman of the Board, Mr. Manuel V. Pangilinan, and was attended by stockholders, who own or hold over 960,000,000 shares or approximately 85.18% of the 1,127,098,705 issued and outstanding common shares of the Company entitled to vote, were present in person or by proxy.
Also present during the AGM are the President and CEO, Mr. Oscar S. Reyes; the Chairperson of Audit Committee, Retired Chief Justice Artemio V. Panganiban; and all other members of the Board elected at the AGM were present. In compliance with the disclosure requirements, the results of the meeting, together with the list of the attendees including the elected board members, were disclosed to the SEC and PSE within the day of the AGM. Please refer to the section on Board Performance for the detailed attendance of the Board to the AGM.

All Shareholders were given equal opportunity to voice their opinions and raise questions during the meeting within the appropriate time frame, and allowed concerned directors and officers of the Company to answer and provide clarifications. Even prior to the meeting, shareholders were also allowed to submit their questions through phone or e-mail to the Stockholders Relations office at . However, only the questions related to the Company’s operations or considered with material impact on the operating results were considered in the AGM.

The minutes of the meeting recorded in writing every resolution, showing the number of approval, objection and abstention votes for each agenda item. Questions, responses, opinions that arose during the meeting were fully documented and made available for examination afterwards. Summary of the Minutes of the AGM was posted in the website the next working day after the AGM.

Dividend Policy

The Company believes that the major responsibility of the BOD is to optimize the long-term value of the Company, and ensures that all shareholders are given their fair share in the benefits arising from such value.

The Company’s dividend policy, as approved by the Board and ratified by the shareholders during the May 25, 2010 AGM, calls for the payment of regular cash dividends equivalent to 50% of core earnings for the year with a “look-back” basis, which allows the Company to pay special dividends of up to 70% of the core earnings for the year, relative to availability of unrestricted retained earnings and cash, in accordance with the guidelines of the Securities and Exchange Commission (SEC).

B. Employees

Meralco is committed to the development and welfare of its employees. As the Company sustains its efforts in building a high performance culture to fully respond to the requirements of the new business environment, employees are continuously trained and developed to enable them to achieve excellent performance founded on our corporate values. Career development programs are implemented to ensure professional growth through skills and job enrichment opportunities, learning and development programs, performance management and promotions systems. Employees are compensated based on performance and over-all qualifications and market competitiveness. Adequate provisions for medical, health and other essential benefits; and workplace safety are provided to promote employee welfare and well-being. Uprightness and impartiality are observed in conflict resolution. HR Programs for our employees are continuously reviewed and enhanced to ensure their over-all effectiveness and responsiveness.

The Company is further committed in sustaining and/or further enhancing the high level of engagement of employees. Guided by the results of an employee engagement survey conducted, focused and deliberate initiatives are undertaken to help ensure employees job satisfaction and motivation. Employee communication is strengthened to keep employees well-informed on significant developments. Employees are likewise encouraged to give feedback and suggestions to Management to further improve corporate and operational performance, promoting employee accountability and empowerment.

Click the following links to view metrics related to employee welfare:
Health and Safety Metrics
Training Metrics
2014 Annual Safety & Environment Performance Report
Click link to Revised Manual of Corporate Governance for more details.

C. Subsidiaries

As one of Meralco’s five strategic business pillars, the subsidiaries contribute significantly in boosting shareholder value.

The Subsidiary Management Policy continues to serve as the guidebook in creating and managing subsidiaries based on the criteria and principles embodied in the Revised Manual of Corporate Governance, Code of Ethics, and existing laws, rules and regulations.

Meralco continues to strengthen the good governance practice of its subsidiaries by strongly advocating the need for each subsidiary to adopt its 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 suppliers whose business practices respect human dignity and the environment.

Revised Manual of Corporate Governance