Director and Executive Remuneration Policy

REMUNERATION PHILOSOPHY

Our Board aligns the remuneration of directors and key officers with the long-term interests of the company.

Our remuneration philosophy aims to closely link overall compensation with individual performance, company performance and shareholder value. It espouses a pay-for performance culture that ensures talent and contributions of the Board, management and personnel are recognized and rewarded accordingly.

Our compensation and reward policy accounts for performance of our company with a Balanced Scorecard approved by the Board and cascaded to all levels throughout the organization.

DIRECTOR REMUNERATION

Director remuneration shall be determined at an appropriate level with due regard of the significant contribution and performance by Board Directors of their oversight duties and functions. Director remuneration level shall be commensurate with Boards of similar size and type, and market practice for Directors with similar role and type. Compensation structure shall be reviewed regularly.

Remuneration of Directors is determined by the Board, upon the recommendation of the Compensation and Remuneration Committee, within the maximum amount approved by Shareholders. The Committee avails itself of outside professional advice to assist with its deliberations.

Aggregate total annual remuneration package of all Directors shall not exceed ten percent (10%) of the Company’s Net Income before income tax of the preceding year. Moreover, the aggregate amount of Directors’ bonuses during the year shall not exceed two percent (2%) of the Company’s profit before tax of the previous year as per its Amended By-Laws.

EXECUTIVE DIRECTORS

Total Executive Director remuneration shall consist of:

   • Annual fixed retainer of Two Hundred Forty Thousand Pesos, (P 240,000.00) per Executive Director, to be applied against twelve meetings in one calendar year, (as approved in May 2009 Annual Shareholders Meeting);

   •  Board Committee meeting per diem of Twenty Thousand Pesos, or P 20,000, per meeting for each Director serving a Board Committee, (as approved in May 2009 Annual Shareholders Meeting);

   • Additional per diem and reimbursement allowance for every Board meeting held in excess of twelve meetings in a calendar year; and

   • Short-term performance-related cash bonus (variable pay), when appropriate and upon approval the Board, subject to the prescribed limit set by the Company’s Amended By-Laws.

NON-EXECUTIVE DIRECTORS (NEDs) and INDEPENDENT DIRECTORS (IDs)

On May 4, 2015 Annual Shareholders Meeting, the Shareholders approved the increase of fixed retainer fees of NEDs and IDs effective June 1, 2015. The approved amount is set at an appropriate level with due regard of the significant contribution of Non-Executive Directors and Independent Directors in the performance of board functions and duties, and to align directors’ fees to market for similar roles at a level commensurate with Boards of similar size and type. Further, the approved increase in the fees result to a compensation restructure of a fixed pay without variable pay for Non-Executive Directors and Independent Directors in consonance with ASEAN Corporate Governance Scorecard best practices espoused by SEC.

To take effect on June 1, 2015, total remuneration for NEDs and IDs shall consist of:

• Fixed annual retainer fee of One Million Eight Hundred Thousand Pesos (P 1,800,000), or One Hundred Fifty Thousand Pesos (P 150,000) payable per month, per NED and ID;and
• Board Committee per diem of Twenty Thousand Pesos (P 20,000) for each Director serving a Board Committee.

EXECUTIVE REMUNERATION

The Compensation & Remuneration Committee reviews executive remuneration and other terms of employment annually as appropriate. The review gives regard to performance goals set at the start of the year and against relevant comparative information including independent expert advice. Remuneration packages are set at levels that are intended to attract and retain senior executives of sufficient calibre to facilitate the efficient and effective management of the Company’s operations.

The guiding principles in managing senior executive remuneration are that:

• All elements of remuneration should be set at an appropriate level having regard to market practice for similar roles; and
• Incentives should be used to differentiate reward for high performers and to encourage continuous improvements in performance levels.

This is achieved via a mixture of:

• Fixed monthly compensation consisting of fixed basic salary and/or reimbursable allowances where applicable;
• Short-term cash bonus incentive, with appropriate performance hurdles.

The Compensation and Remuneration Committee shall review this Policy annually and recommend any proposed changes to the Board for approval.